In This Article:
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Core FFO per Share: $4.21 in Q4, a 20 basis point increase year over year.
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Same Store Revenue: Declined 60 basis points year over year in Q4, improving from a 130-basis-point decline in the prior quarter.
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Same Store Expenses: Increased 90 basis points year over year, driven by property taxes.
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Annual Retained Cash Flow: Expected to increase from $400 million in 2024 to approximately $600 million in 2025.
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Acquisition Activity: 26 properties acquired or under contract for $361 million in Q4.
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Development Pipeline: $740 million to be delivered over the next two years.
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Digital Transformation: 85% of customer interactions and transactions are digital, up from 30% in 2019.
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Solar Program: Implemented in nearly 900 properties, resulting in a 30% reduction in utility use.
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2025 Core FFO per Share Guidance: $16.35 to $17, with a midpoint consistent with 2024.
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Same Store NOI: Expected to decline 1.4% at the midpoint in 2025.
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Non-Same Store Portfolio NOI: $454 million assumed at the midpoint for 2025.
Release Date: February 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Public Storage (NYSE:PSA) ended 2024 on a positive note with broad operational stabilization across nearly all markets.
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Quarterly same store revenue growth improved sequentially for the first time in over two years.
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The Property of Tomorrow program, a $600 million investment, was completed, enhancing brand positioning and expected to increase annual retained cash flow significantly.
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Digital transformation has advanced, with 85% of customer interactions now digital, leading to a 30% reduction in on-property labor hours.
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The solar program has reached nearly 900 properties, resulting in a 30% reduction in utility use, benefiting both financials and the environment.
Negative Points
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Same store revenues declined 60 basis points year over year in the fourth quarter.
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Los Angeles market faces challenges due to pricing restrictions from a state of emergency, impacting revenue by an estimated 100 basis points.
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Move-in rents are expected to be down 5% year over year on average in 2025.
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Occupancy is projected to be down 10 basis points on average, reflecting ongoing competitive dynamics.
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Same store NOI is expected to decline by 1.4% at the midpoint due to increased property taxes and other expenses.
Q & A Highlights
Q: Can you elaborate on the assumptions for street rates and occupancy for 2025? A: H. Thomas Boyle, CFO, explained that they expect move-in rents to be down 5% on average for 2025, which is an improvement from the start of the year where rents were down 8%. Occupancy is expected to be down 10 basis points on average, indicating a stabilization in demand. The assumptions are based on competitive dynamics and demand stabilization observed at the start of the year.