Public Storage (PSA) Bundle
A Brief History of Public Storage
Public Storage, founded in 1972, has grown to be a leading self-storage REIT in the United States and Europe, providing storage solutions to millions of customers. As of September 30, 2024, the company operates approximately 2,507 facilities across the U.S. and has a significant presence in Europe through its investment in Shurgard.
Recent Financial Performance
For the three months ended September 30, 2024, Public Storage reported a net income allocable to common shareholders of $380.7 million, or $2.16 per diluted share, compared to $563.2 million, or $3.20 per diluted share for the same period in 2023. This represents a decrease of $182.5 million or $1.04 per diluted share year-over-year. The decline is attributed to increased foreign currency losses, depreciation expenses, and interest expenses, partially offset by an increase in self-storage net operating income.
Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Income | $380.7 million | $563.2 million | -32.5% |
| Net Income per Diluted Share | $2.16 | $3.20 | -32.5% |
| Funds from Operations (FFO) | $738.2 million | $762.9 million | -3.2% |
| Core Funds from Operations (Core FFO) | $738.2 million | $762.9 million | -3.2% |
Acquisitions and Developments
Since the beginning of 2022, Public Storage has acquired a total of 243 facilities with 17.2 million net rentable square feet for $3.5 billion. Notably, in 2023, the company acquired BREIT Simply Storage LLC, which added 127 self-storage facilities for $2.2 billion. The newly developed and expanded facilities include 127 self-storage facilities with 15.3 million net rentable square feet, with a total cost incurred of $1.6 billion as of September 30, 2024.
Occupancy and Rental Rates
| Year Developed | Occupancy Rate | Annual Rent per Occupied Square Foot |
|---|---|---|
| 2019 | 86.0% | $18.53 |
| 2020 | 90.7% | $22.04 |
| 2021 | 78.4% | $19.92 |
| 2022 | 86.6% | $17.33 |
| 2023 | 68.7% | $10.22 |
| 2024 | 45.7% | $9.67 |
Dividends and Shareholder Returns
Public Storage has maintained a consistent dividend policy, distributing $3.00 per common share for both the three months ended September 30, 2024, and 2023, totaling $526.2 million in dividends for Q3 2024. For the nine months ended September 30, 2024, dividends paid amounted to $1.6 billion, maintaining the same level as the previous year.
Future Outlook
As of September 30, 2024, Public Storage is focusing on expanding its portfolio through selective acquisitions and the development of new facilities. The company has a robust pipeline of development and expansion projects, totaling approximately $712.4 million, with $310.5 million incurred to date and the remainder expected to be spent in the coming years.
A Who Owns Public Storage (PSA)
Major Shareholders
As of September 30, 2024, the major shareholders of Public Storage (PSA) include:
- Vanguard Group, Inc.: 8.4% ownership
- BlackRock, Inc.: 7.9% ownership
- State Street Corporation: 5.1% ownership
- Tamara Hughes Gustavson: 4.2% ownership
- Other Institutional Investors: 74.4% ownership combined
Stock Performance
Public Storage's stock performance as of September 30, 2024, is as follows:
| Metric | Value |
|---|---|
| Stock Price (Closing) | $335.00 |
| Market Capitalization | $58.6 billion |
| 52-Week High | $370.00 |
| 52-Week Low | $290.00 |
| Dividend Yield | 3.6% |
Financial Overview
As of the third quarter of 2024, Public Storage reported the following financial data:
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income | $433.1 million | $616.6 million |
| Net Income per Share (Diluted) | $2.16 | $3.20 |
| Total Revenue | $1.1 billion | $1.08 billion |
| Net Operating Income (NOI) | $822.7 million | $810.9 million |
| Funds From Operations (FFO) | $2.43 per share | $2.42 per share |
Debt Obligations
Public Storage's debt obligations as of September 30, 2024, include:
| Debt Type | Amount (in billions) | Interest Rate |
|---|---|---|
| Senior Notes | $9.5 billion | 4.08% - 5.35% |
| Mortgage Debt | $1.7 billion | 4.35% |
| Total Debt | $11.2 billion |
Ownership Structure
The ownership structure of Public Storage as of September 30, 2024, is as follows:
| Type of Ownership | Percentage |
|---|---|
| Institutional Investors | 74.4% |
| Individual Investors | 20.0% |
| Insider Ownership | 5.6% |
Recent Acquisitions
Public Storage has been active in acquiring self-storage facilities. As of September 30, 2024, key acquisition details include:
| Year | Facilities Acquired | Net Rentable Square Feet (in millions) | Cost (in billions) |
|---|---|---|---|
| 2022 | 74 | 4.7 | $0.7 |
| 2023 | 164 | 12.1 | $2.7 |
| 2024 | 5 | 0.3 | $0.05 |
International Holdings
Public Storage holds approximately 35% equity interest in Shurgard, a European self-storage company. As of September 30, 2024, the market value of this investment is approximately:
| Metric | Value |
|---|---|
| Shurgard Shares Owned | 34.6 million |
| Market Price per Share | €42.10 |
| Market Value (in billion USD) | $1.6 billion |
Public Storage (PSA) Mission Statement
Company Overview
Public Storage (NYSE: PSA) is a leading self-storage real estate investment trust (REIT) that operates thousands of storage facilities across the United States and Europe. As of September 30, 2024, Public Storage had approximately 28 million net rentable square feet across its portfolio, with a total of 2,883 facilities in operation, reflecting the company's commitment to providing secure and accessible storage solutions.
Mission Statement
Public Storage's mission is to provide a clean, safe, and secure environment for its customers' belongings, while delivering exceptional service and value. The company aims to be the best self-storage operator in the industry by continuously improving operations and enhancing customer experience.
Financial Performance
As of September 30, 2024, Public Storage reported the following financial highlights:
| Financial Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Income | $22.3 million | $23.5 million | (5.1%) |
| Net Operating Income (NOI) | $39.8 million | $37.4 million | 6.2% |
| Same Store Revenue | $12.3 million | $12.5 million | (1.6%) |
| Funds from Operations (FFO) | $7.43 per share | $8.85 per share | (16.0%) |
| Total Revenue | $167.2 million | $154.5 million | 8.2% |
Operational Strategies
Public Storage has focused on several operational strategies to enhance its mission, including:
- Expansion of facilities: Since 2022, PSA has acquired 243 facilities totaling 17.2 million net rentable square feet for $3.5 billion.
- Technology investments: Implementation of technology to enhance operational efficiency and reduce costs, particularly in payroll and utilities.
- Customer experience initiatives: Launch of the 'Property of Tomorrow' program to upgrade facility branding and layout, with an expected spend of $130 million in 2024.
Market Position
Public Storage is the largest self-storage provider in the United States and has a significant presence in Europe. The company's competitive position is strengthened by its vast network of facilities and its commitment to maintaining high standards of service and security.
Challenges and Future Outlook
Despite its strong market position, Public Storage faces challenges such as fluctuating demand for storage space and increasing operational costs. The company anticipates a moderate decline in Same Store Facilities revenues in 2024 due to lower home-moving activities and increased promotional discounts aimed at attracting new customers.
As of September 30, 2024, the company expects to continue investing in growth opportunities while managing costs effectively to maintain profitability and shareholder value.
How Public Storage (PSA) Works
Company Overview
Public Storage (PSA) is a leading self-storage company, operating facilities across the United States and Europe. As of September 30, 2024, it manages a total of 2,507 self-storage facilities, alongside acquired and newly developed properties. The company aims to provide convenient and secure storage solutions to a diverse customer base.
Financial Performance
For the three months ended September 30, 2024, Public Storage reported:
- Net income allocable to common shareholders: $380.7 million, or $2.16 per diluted share.
- Net income for the same period in 2023 was $563.2 million, or $3.20 per diluted share.
- Year-over-year decrease in net income: $182.5 million or 32.5%.
For the nine months ended September 30, 2024:
- Net income allocable to common shareholders: $1.3 billion, or $7.43 per diluted share.
- Net income for the same period in 2023 was $1.6 billion, or $8.85 per diluted share.
- Decrease in net income of $250.8 million or 16.0%.
Revenue Breakdown
Public Storage's revenue is categorized into several segments:
| Segment | Q3 2024 Revenue ($ thousands) | Q3 2023 Revenue ($ thousands) | Change (%) |
|---|---|---|---|
| Same Store Facilities | 926,315 | 938,572 | (1.3) |
| Acquired Facilities | 61,116 | 23,683 | 158.1 |
| Newly Developed and Expanded Facilities | 58,135 | 53,758 | 8.1 |
| Other Non-Same Store Facilities | 64,549 | 62,708 | 2.9 |
| Total Revenue | 1,110,115 | 1,078,721 | 2.9 |
Cost of Operations
Public Storage's cost of operations for Q3 2024 was reported as follows:
| Segment | Q3 2024 Cost of Operations ($ thousands) | Q3 2023 Cost of Operations ($ thousands) | Change (%) |
|---|---|---|---|
| Same Store Facilities | 226,704 | 220,931 | 2.6 |
| Acquired Facilities | 20,871 | 8,233 | 153.5 |
| Newly Developed and Expanded Facilities | 18,364 | 16,311 | 12.6 |
| Other Non-Same Store Facilities | 21,496 | 22,310 | (3.6) |
| Total Cost of Operations | 287,435 | 267,785 | 7.3 |
Net Operating Income (NOI)
Net operating income for the three months ending September 30, 2024, was as follows:
| Segment | Q3 2024 NOI ($ thousands) | Q3 2023 NOI ($ thousands) | Change (%) |
|---|---|---|---|
| Same Store Facilities | 699,611 | 717,641 | (2.5) |
| Acquired Facilities | 40,245 | 15,450 | 160.5 |
| Newly Developed and Expanded Facilities | 39,771 | 37,447 | 6.2 |
| Other Non-Same Store Facilities | 43,053 | 40,398 | 6.6 |
| Total NOI | 822,680 | 810,936 | 1.4 |
Occupancy Rates
As of September 30, 2024, the weighted average square foot occupancy for Public Storage's Same Store Facilities was:
- Q3 2024: 92.7%
- Q3 2023: 93.2%
Acquisitions and Developments
Since the beginning of 2022, Public Storage has acquired a total of 243 facilities with:
- 17.2 million net rentable square feet for a total cost of $3.5 billion.
- Newly Developed and Expanded Facilities include 127 self-storage facilities with 15.3 million net rentable square feet.
Cash Flow and Financing Activities
For the nine months ended September 30, 2024, cash flows from operating activities totaled $2.36 billion, while cash flows used in investing activities amounted to ($590.99 million).
Public Storage has also engaged in share repurchase programs, buying back 726,865 shares for a total cost of $200 million during Q2 2024.
Market Trends and Outlook
The self-storage industry has faced fluctuations in demand due to economic conditions. Public Storage anticipates weaker industry-wide demand for the remainder of 2024 compared to 2023, but expects improvements in the year-over-year decline.
How Public Storage (PSA) Makes Money
Revenue Streams
Public Storage (PSA) primarily generates revenue through the following segments:
- Self-storage operations
- Ancillary operations
Self-Storage Operations
For the three months ended September 30, 2024, revenues from self-storage facilities amounted to $1,110.1 million, compared to $1,078.7 million for the same period in 2023, reflecting a 2.9% increase. For the nine months ended September 30, 2024, revenues were $3,295.9 million, up from $3,167.0 million in 2023, marking a 4.1% increase.
Revenue Breakdown
| Revenue Source | Q3 2024 Revenues ($ million) | Q3 2023 Revenues ($ million) | Change (%) | 9M 2024 Revenues ($ million) | 9M 2023 Revenues ($ million) | Change (%) |
|---|---|---|---|---|---|---|
| Same Store Facilities | 926.3 | 938.6 | (1.3) | 2,761.1 | 2,782.5 | (0.8) |
| Acquired Facilities | 61.1 | 23.7 | 158.1 | 179.3 | 48.9 | 266.7 |
| Newly Developed and Expanded Facilities | 58.1 | 53.8 | 8.1 | 167.2 | 154.5 | 8.2 |
| Other Non-Same Store Facilities | 64.5 | 62.7 | 2.9 | 188.4 | 181.1 | 4.0 |
Ancillary Operations
Ancillary operations include income from tenant reinsurance and merchandise sales. For the three months ended September 30, 2024, ancillary operations generated $77.6 million, while for the nine months, they totaled $222.3 million, compared to $65.1 million and $190.8 million in the respective periods of 2023.
Cost Structure
The cost of operations for self-storage facilities for Q3 2024 was $287.4 million, up from $267.8 million in Q3 2023, reflecting a 7.3% increase. For the nine months ended September 30, 2024, the cost was $858.4 million, compared to $794.1 million in the same period of 2023.
Net Operating Income (NOI)
Net operating income for self-storage operations in Q3 2024 was $822.7 million, compared to $810.9 million in Q3 2023, a 1.4% increase. For the nine months, NOI was $2,437.5 million, up from $2,372.9 million, marking a 2.7% increase.
Recent Acquisitions and Developments
Since the beginning of 2022, Public Storage has acquired a total of 243 facilities with 17.2 million net rentable square feet for $3.5 billion. In 2023, PSA acquired BREIT Simply Storage LLC for $2.2 billion, which included 127 self-storage facilities and contributed $113.9 million in revenues and $77.9 million in NOI for the nine months ended September 30, 2024.
Investment in Development
Public Storage has invested $1.6 billion in newly developed and expanded facilities as of September 30, 2024, which contributed $39.8 million and $112.5 million in NOI for Q3 and nine months of 2024, respectively.
Financial Summary
For the nine months ended September 30, 2024, net income allocable to common shareholders was $1.3 billion, or $7.43 per diluted common share, compared to $1.6 billion, or $8.85 per diluted common share for the same period in 2023.
Market Conditions and Future Outlook
Industry-wide demand for self-storage has weakened in 2024 compared to 2023, attributed to lower home-moving activities. PSA expects to mitigate impacts through increased marketing expenses and promotional discounts. The average annual contract rent per square foot decreased to $14.45 in Q3 2024, down from $15.96 in Q3 2023, a 9.5% decline.
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Article updated on 8 Nov 2024
Resources:
- Public Storage (PSA) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Public Storage (PSA)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Public Storage (PSA)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.