Public Storage raises 2026 Core FFO outlook as third-quarter net income falls 35.5%

Public Storage (NYSE: PSA) raised its 2026 outlook after reporting third-quarter Core funds from operations (FFO) of $4.34 a share, up 0.7% from $4.31 a year earlier, while net income fell 35.5% to $1.69 a share, according to its earnings release on October 26.

What happened

Core FFO, a real estate investment trust (REIT) earnings measure that excludes real estate depreciation, property sale gains and losses and other items, rose 0.7% in the quarter. Net income per share was $1.69, compared with $2.62 a year earlier. For the nine months, net income was $6.92 a share, up from $6.42, and Core FFO was $12.74, up from $12.71.

In the 2,755 same store facilities, which represent about 71% of net rentable square feet in the US consolidated portfolio, revenue rose 0.5% to $1.02 billion and net operating income (NOI) rose 0.5% to $768.8 million. Average occupancy was 92.2%, up from 91.9%. Non-same store revenue and NOI grew 90.8% and 91.8%.

The company raised its 2026 Core FFO outlook to $16.90-$17.10 a share from $16.75-$17.05. It now expects same store NOI growth of negative 0.8% to positive 0.2%, up from negative 2.0% to negative 0.3%.

"We continue to post encouraging trends on churn, occupancy, and move-in rates, which drove positive Same Store revenue, NOI and Core FFO per share growth," said Tom Boyle, Chief Executive Officer.

The background

Public Storage completed the all-stock acquisition of National Storage Affiliates (NSA) on July 22, expanding its portfolio to more than 4,500 locations, and expects $110 million to $130 million of run-rate synergies from it within three to four years. On September 1 it completed the acquisition of PS Canada, 68 properties, for US $1.2 billion including assumed debt.

Total debt was $12.2 billion at September 30, with $650 million, or 5.3%, due in the fourth quarter. Net debt to EBITDA was 3.4 times, compared with 3.0 times a year earlier. Joe Fisher, President and Chief Financial Officer, said the company has completed $6.2 billion of debt capital markets activity and $6.0 billion of common share and partnership unit issuance or committed issuance this year.

What to watch

Public Storage is scheduled to discuss the results on a conference call on October 27 at 11:00 a.m. CT.