Public Storage Q1 FFO Beats Estimates, Occupancy Falls

Public Storage PSA reported first-quarter 2025 core funds from operations (FFO) per share of $4.12, which surpassed the Zacks Consensus Estimate of $4.06. Also, the figure increased 2.2% year over year from $4.03.

Results were backed by top-line growth, with the company experiencing higher realized annual rent per occupied square foot, though a fall in occupancy partly offset the positive. PSA also reaffirmed its 2025 guidance.

Quarterly revenues of $1.18 billion exceeded the Zacks Consensus Estimate of $1.17 billion. Revenues were also up 2.2% year over year.

Behind PSA’s Headlines

Public Storage’s same-store revenues increased 0.1% year over year to $934.5 million in the first quarter due to higher realized annual rent per occupied square foot, offset by a decline in occupancy. This storage REIT witnessed a 0.6% increase in realized annual rental income per occupied square foot to $22.48. The weighted average square foot occupancy of 91.5% was down 0.6% year over year. Our estimate was 89.7%.

The cost of operations for same-store facilities increased 0.3% year over year due to increased property tax expenses, offset by decreased on-site property manager payroll
expenses.

PSA’s same-store net operating income (NOI) remained almost flat year over year at $691.5 million. However, this REIT’s NOI growth from non-same-store facilities was $13.5 million due to the impact of facilities acquired in 2023 and 2024.

The company achieved a 77.1% same-store direct NOI margin in the quarter, the same as in the prior-year quarter.

Interest expenses increased to $72 million in the first quarter, up 6.2% from the year-ago period. Our estimate was $68 million.

PSA’s Portfolio Activity

In the first quarter, Public Storage acquired nine self-storage facilities, comprising 0.7 million net rentable square feet of space, for $141 million. Following March 31, 2025, PSA acquired or was under contract to acquire five self-storage facilities with 0.4 million net rentable square feet for $43.2 million.

It opened three newly developed facilities and completed several expansion projects, which together added 0.7 million net rentable square feet, costing $144.4 million.

As of March 31, 2024, Public Storage had several facilities in development (expected to contribute around 2.4 million net rentable square feet), estimated to cost $492.9 million, and various expansion projects (expected to contribute around 1.3 million net rentable square feet), estimated to cost $172.6 million. It expects to incur the remaining $424.8 million of development costs related to these projects over the next 18 to 24 months.

PSA’s Balance Sheet Position

Public Storage exited the first quarter of 2025 with $287.2 million of cash and equivalents, down from $447.4 million as of year-end 2024.

PSA’s 2025 Guidance

Public Storage has reaffirmed its 2025 core FFO per share projections in the range of $16.35-$17.00. The Zacks Consensus Estimate is currently pegged at $16.79.

The company’s full-year assumption is backed by a 1.3% decline to 0.8% growth in same-store revenues, a 2.5% to 4% rise in same-store expenses and a 2.9% decline to 0.2% expansion in same-store NOI. These projections are the same as those guided earlier.

Further, the company projects $370 million in development openings and expects capital expenditures relating to maintenance of real estate facilities amounting to $150 million and $50 million in energy efficiencies.

Public Storage currently carries a Zacks Rank #4 (Sell).

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 Another Self-Storage REIT

Extra Space Storage Inc. EXR reported first-quarter 2025 core FFO per share of $2.00, beating the Zacks Consensus Estimate of $1.96. The figure increased 2% from the prior-year quarter. Quarterly revenues of $820 million missed the Zacks Consensus Estimate of $823.4 million. However, the top line increased 2.6% year over year.

Results reflected a year-over-year rise in revenues due to growth in occupancy. However, high interest expenses during the quarter were a spoilsport.

Upcoming Earnings Releases

We now look forward to the earnings release of another REIT — Realty Income Corporation O — which is slated to report on May 5.

The Zacks Consensus Estimate for Realty Income’s first-quarter 2025 FFO per share stands at $1.06, indicating a 2.9% increase year over year. O currently has a Zacks Rank #3 (Hold). (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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