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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.