Public Storage (PSA) Q3 2024 Earnings Call Highlights: Navigating Challenges with Strategic ...

GuruFocus News
3 min read

In This Article:

  • Core FFO: $4.20 per share, a 3% decline compared to last year.

  • Same-Store Revenue: Declined 1.3% compared to last year.

  • Move-In Rents: Down 9% year over year in the third quarter, down 5% in October.

  • FFO Guidance: Reiterated at $16.50 to $16.85 per share.

  • Incremental NOI Outlook: Increased to $120 million from the non-same-store pool of assets.

  • Solar Power Goal: Increased to 1,300 properties by the end of 2025.

Release Date: October 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Public Storage (NYSE:PSA) is experiencing stabilization and improvement in operating fundamentals across most markets, with move-in rents showing a significant recovery from earlier in the year.

  • The company has successfully implemented a comprehensive digital engagement strategy, with 75% of move-ins now using e-rental and nearly 2 million users on the PS app.

  • Public Storage (NYSE:PSA) has reduced utility usage by 30% through LED lighting and solar power installations, with plans to expand solar installations to 1,300 properties by the end of 2025.

  • The acquisition market is showing signs of picking up, with more one-off deals and portfolios becoming available, aligning with Public Storage (NYSE:PSA)'s strong capital and liquidity profile.

  • Public Storage (NYSE:PSA) has maintained a strong existing customer base, with stable payment patterns, long average length of stay, and reduced move-outs year to date.

Negative Points

  • Core FFO declined by 3% compared to last year, and revenues in the same-store portfolio decreased by 1.3% year over year.

  • Move-in rents are still down 5% in October, indicating that while improving, pricing pressures remain.

  • The company anticipates a slight decrease in development deliveries in 2025 compared to the record year of 2024.

  • Promotional discounts increased in the third quarter, potentially impacting revenue, with 60% of customers receiving some form of promotion.

  • Occupancy is down 90 basis points year over year, reflecting ongoing challenges in maintaining full capacity.

Q & A Highlights

Q: Can you elaborate on your outlook for 2025, given the stabilization and improvement trends you've mentioned? A: Joseph Russell, CEO, explained that 2024 has been a year of stabilization, with better market improvement across the portfolio. This trend is expected to continue, positioning Public Storage better for 2025. Factors like an improved housing market or changes in interest rates could further influence this positive trajectory.

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