This article first appeared on GuruFocus .
-
Core FFO:$4.17 per share for the second quarter of 2026, down year-over-year.
-
Same-Store Revenue Growth:-0.6% for the second quarter.
-
Same-Store NOI Growth:-2.2% for the second quarter.
-
Average Move-In Rent Growth:+1.6% year-over-year in the second quarter, the first positive reading since 2021.
-
Occupancy:92.5% at the end of the second quarter, up 0.2% year-over-year.
-
Same-Store Expense Growth:+4.4% for the second quarter.
-
Non-Same-Store NOI Growth:+22% for the second quarter.
-
Ancillary Growth:+15% for the second quarter.
-
2026 Core FFO Guidance:Raised to a range of $16.75 to $17.05 per share, with a midpoint of $16.90.
-
2026 Same-Store Revenue Growth Guidance:Raised to a midpoint of -0.2%.
-
2026 Same-Store NOI Growth Guidance:Raised to a midpoint of -1.1%.
-
NSA Core FFO (Year-to-Date 2026):$1.14 per share.
-
NSA NOI Growth (Year-to-Date 2026):+2.4%.
-
Development Pipeline:$692 million across 47 projects, with stabilized yields targeting 8%.
-
Lending Platform:$173 million outstanding, up $30 million from the prior quarter, at a current rate of approximately 7.6%.
-
Net Debt to EBITDA:2.9 times.
-
Net Debt Plus Preferred Equity to EBITDA:4.2 times.
Release Date: July 30, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
-
Public Storage ( NYSE:PSA ) successfully closed the NSA transaction, transitioning 1,100 stores and 575,000 units onto its platform overnight, with over 1,500 reservations and 265,000 auto-pay accounts switched on day one.
-
The company announced the acquisition of Public Storage Canada, a strategic entry into an underpenetrated Canadian market with high-quality infill assets and significant embedded upside for future growth.
-
Core operating metrics are improving, with average move-in rents turning positive at +1.6% year-over-year in Q2 2026, the first time since 2021 that both move-in rates and occupancy were up.
-
Guidance was raised across all key metrics for 2026, with same-store revenue growth now expected to exit the year positive in the fourth quarter, driven by improved new move-in rates and occupancy.
-
The company's balance sheet remains strong with net debt to EBITDA of 2.9x, and it has completed approximately $12 billion in capital markets activity year-to-date, fully funding accretive external growth.
Negative Points
-
Same-store revenue and NOI growth were negative in Q2 2026 at -0.6% and -2.2% respectively, though ahead of internal expectations.
-
Expense growth was positive at 4.4% for the quarter, with pressure from property taxes and increased incentive compensation costs.
-
Sun Belt markets continue to lag, with Tampa seeing NOI down 10%, Miami down 3%, and Atlanta down 6%, as they work through new supply and tough comps.
-
The LA County state of emergency expiration creates a -50 basis point headwind to same-store revenue growth in 2026, with a measured and phased approach to recapturing market rents.
-
The company raised equity via an ATM program, issuing nearly 800,000 shares, which can be modestly dilutive to near-term FFO per share.
Q & A Highlights
Here are the key highlights from the Public Storage ( NYSE:PSA ) Q2 2026 earnings call, focusing on the most significant Q&A exchanges.
Q: Can you discuss the decision to raise equity here? You have ample leverage capacity, over $600 million in free cash flow. Why raise now and how do you think about your various capital sources? A: (Joseph Fisher, President & CFO) We view the ATM as another arrow in the quiver to keep our capital allocation flywheel going. When we look at our cost of capital, which is about 5% when combining equity and leverage, and compare it to our deployment into lease-up assets (which have a lower initial yield but grow to high 6s/low 7s), we are putting on over 100 basis points of incremental spread. This compounds our earnings per share profile. The raise was done in moderation with an identified use for our acquisition momentum and increased development/lending.
Q: On the LA front, how quickly can you capture the revenue from LA? Maybe just walk us through the math for this year and then the next year as we think about the upside. A: (Joseph Fisher, President & CFO) The state of emergency expiration on July 1 was factored into our original guidance as an 80 basis point drag. We have improved that to a 50 basis point headwind for the year, meaning 30 basis points of our guidance increase comes from LA. We will take a measured, phased approach to recapturing that revenue. As a reminder, we lost about 70 basis points of same-store revenue growth in '25 and another 50 net this year, which gives you an idea of what we left on the table and may be able to recapture in the future given the robust demand/supply environment.
Q: On the NSA transaction, you mentioned expansion opportunities. Have you identified any sort of incremental revenue or cost synergies beyond the original underwriting? A: (H. Thomas Boyle, CEO) Yes. On the capital side, we've identified expansion opportunities on existing NSA assets, and we just greenlit one this week. More tactically, we found about 14,000 units that we can bring back online with some R&M spend, adding incremental inventory for the second half of 2026. Regarding overall synergy expectations, our confidence continues to grow. Getting our systems in place overnight gave us immediate visibility and tools for the unified team. We expect to execute on the roadmap provided in March, but we have more confidence now that we have the visibility and teams in place.
Q: Can you provide an update on July and how that's reflected in your guidance where you expect revenue growth to accelerate slightly through the back half? A: (H. Thomas Boyle, CEO) July trends have continued the momentum from June. Occupancy is up about 30 basis points year-over-year, churn continues to be lower, and move-in rents remain positive. This is driven by steady demand, reducing new supply, and our customer experience initiatives. (Joseph Fisher, President & CFO) For the second-half trajectory, we expect to go off the minus 60 bps in Q2, see it get a little better in Q3, and turn positive in Q4. The critical piece is the earn-in we are building from recent momentum in ECRIs, lower churn, higher occupancy, and improving move-in rates.
Q: On the move-out rate trajectory, to what extent was the 3.5% year-over-year decline being driven by mix, specifically longer-tenured customers remaining in storage? A: (H. Thomas Boyle, CEO) It's a combination of things. First, longer-term tenants are continuing to stay with us, which is helpful. Second, it is a lagging indicator of where move-in rents were. As move-in rents move higher, you'd expect that decline to start to moderate. But it was certainly an additive component in the second quarter.
Q: You achieved positive move-in rate growth around 1.6%. Has this led to any changes in your ECRI program? A: (H. Thomas Boyle, CEO) The ECRI strategies are pretty consistent year-over-year. As move-in rents move higher, it reduces the replacement cost component in our modeling and optimization, which should lead to stronger ECRI contributions over time. The 1.6% growth is modest, but as that moves higher, it will only be additive to the program.
Q: On the churn point coming down and the focus on customer service, what has been most effective in limiting churn? A: (H. Thomas Boyle, CEO) The most important driver has been listening to our customers. We've put in new survey programs, going from 2,000-3,000 surveys a month to about 90,000. This feedback enables the team to resolve concerns and provide a better, more reliable customer experience. When issues come up, we can resolve them faster. We are seeing this benefit play out in improved customer sentiment scores.
Q: You mentioned that demand has been steady, but also some confidence in demand growth as millennials and Gen Z age into the core range for storage use. When could we see demand actually pick up? A: (H. Thomas Boyle, CEO) Millennials are our largest customer cohort today and are using storage with a higher propensity than prior generations at the same age. Gen Z is following suit. This is a tailwind we see over the next 10-15 years. We are seeing it today. We are at the latter end of stabilization and into recovery, as evidenced by occupancy and move-in rents both being positive year-over-year for the first time since 2021.
Q: You mentioned savings in payroll from your machine learning-based staffing models. What does that entail and what is the magnitude? A: (Joseph Fisher, President & CFO) This has been in process for 3-4 years, studying the dynamics of each property (traffic, risk, seasonality) to determine exact staffing needs. From start to today, we are down over 30% in hours. At the same time, we are giving field staff a more fulfilling job with increased pay. For this year, we are down about 1.8% in the quarter, which is a bit less than expected due to new incentive compensation costs. We expect more to come in the future.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
