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 HeadlinesPublic 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 payrollexpenses.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 ActivityIn 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 PositionPublic 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 GuidancePublic 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 QuotePerformance of Another Self-Storage REITExtra 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 ReleasesWe 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.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Public Storage (PSA): Free Stock Analysis Report Realty Income Corporation (O): Free Stock Analysis Report Extra Space Storage Inc (EXR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks