Public Storage's Q3 FFO & Revenues Beat Estimates, '25 View Raised

Public Storage PSA reported third-quarter 2025 core funds from operations (FFO) per share of $4.31, which surpassed the Zacks Consensus Estimate of $4.24. Also, the figure increased 2.6% year over year.

Results were backed by higher realized annual rent per occupied square foot, though a fall in occupancy partly offset the upside. PSA also raised its outlook, backed by stabilizing operations, supply declines and accelerated acquisition volume.

Quarterly revenues of $1.22 billion exceeded the Zacks Consensus Estimate of $1.21 billion. Revenues were also up 3.1% year over year.

Behind PSA’s Headlines

Public Storage’s same-store revenues remained flat year over year at $948.9 million in the third 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 $22.67. The weighted average square foot occupancy of 92.2% was down 0.5% year over year. Our estimate stood at 92%.

The cost of operations for same-store facilities decreased 0.6% year over year to $203.7 million, due to a reduction in all the expenses except for property taxes.

PSA’s same-store net operating income (NOI) remained flat year over year at $717.1 million. However, this REIT’s NOI growth from non-same-store facilities was $21.5 million due to the impact of newly acquired facilities and the lease-up of development/expansion properties.

The company achieved a 78.5% same-store direct NOI margin in the quarter, up 0.1% from the prior-year quarter.

Interest expenses increased 7.3% year over year to $79.7 million in the third quarter, marginally below our estimate of $80.3 million.

PSA’s Portfolio Activity

In the third quarter, Public Storage acquired 49 self-storage facilities, comprising 3.4 million net rentable square feet of space, for $511.4 million. Following Sept. 30, 2025, PSA acquired or was under contract to acquire 12 self-storage facilities with 0.9 million net rentable square feet for $119.9 million.

During the quarter, PSA completed several expansion projects, which together added 0.3 million net rentable square feet, costing $60.4 million.

As of Sept. 30, 2025, Public Storage had several facilities in development (expected to contribute around 2.6 million net rentable square feet), estimated to cost $483.8 million, and various expansion projects (expected to contribute around 1.3 million net rentable square feet), estimated to cost $165.4 million. It expects to incur the remaining $381.4 million of development costs related to these projects over the next 18 to 24 months.

PSA’s Balance Sheet Position

Public Storage exited the third quarter of 2025 with $296.5 million of cash and equivalents, down from $1.1 billion as of June 30, 2025.

PSA’s 2025 Guidance

Public Storage has raised its 2025 core FFO per share projections to the $16.70-$17.00 band, up from the $16.45-$17.00 range guided earlier. The Zacks Consensus Estimate is currently pegged at $16.85 and lies within the guided range.

The company’s full-year assumption is backed by a 0.3% decline to 0.3% growth (previously down 1.3% to 0.8% growth) in same-store revenues, a 1.8% to 2.8% rise (previously 2.3% to 3.0%) in same-store expenses and a 1.2% decline to 0.2% decline (previously down 2.6% to 0.3% growth) in same-store NOI.

Further, the company projects $370 million in development openings and expects capital expenditures relating to the maintenance of real estate facilities amounting to $175 million and $75 million in energy efficiencies.

Public Storage currently carries a Zacks Rank #3 (Hold). 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 Quote

Performance of Another Self-Storage REIT

Extra Space Storage Inc. EXR reported third-quarter 2025 core FFO per share of $2.08, surpassing the Zacks Consensus Estimate of $2.06. The figure increased 0.48% from the prior-year quarter.

Results reflected a year-over-year rise in revenues due to growth in occupancy. However, high same-store expenses and interest expenses during the quarter were a spoilsport. Extra Space Storage carries a Zacks Rank #3.

Upcoming Earnings Release

We now look forward to the earnings release of another REIT — Federal Realty Investment Trust FRT — which is slated to report on Oct. 31.

The Zacks Consensus Estimate for Federal Realty’s third-quarter 2025 normalized FFO per share stands at $1.76, indicating a 2.9% increase year over year. FRT currently has a Zacks Rank #3.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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