Public Storage Guides Fourth-Quarter Core FFO To $4.26, Down Eight Cents From The Third Quarter
The CFO said a property-tax comp, a November refinancing and lower SureGuard income explain the dip, even as same-store revenue accelerates.
Public Storage's implied fourth-quarter core FFO, a per-share measure of REIT earnings, falls to $4.26 from $4.34 in the third quarter, CFO Joe Fisher said on the company's earnings call Tuesday, even as same-store revenue growth is expected to speed up.
Three pieces of an eight-cent drop
Fisher, answering a Mizuho analyst, split the eight-cent step-down into three parts. The third quarter carried a one-time property tax gain: Illinois assessments came in materially below what the company had accrued, and it won appeals in Texas. Those wins lower run-rate taxes going forward but leave a tough comparison for the fourth quarter.
A refinancing in November resets interest costs and will take about a penny. SureGuard, the tenant insurance line, comes off by about a penny from the third quarter.
Offsetting that, Fisher said, same-store revenue should accelerate, non-same-store income should keep contributing, and the ancillary business remains strong.
More upside than expected from NSA
Public Storage, a real estate investment trust that owns and runs self-storage facilities, closed its NSA acquisition in July. Asked by a Bank of America analyst about early reads, Fisher said revenue upside is running ahead of plan. About 14,000 vacant or unrentable units the company inherited are being cleaned up and returned to the rental pool.
He also cited more than $100 million of return-on-investment opportunities in the portfolio, such as developments, expansions and conversions, which he said will take time to play out. Move-in volumes in August and September were up well over 30%, while the company dropped move-in rates a little, as planned.
Wellpower costs run through G&A
A KeyBanc analyst asked about the company's data-science deal with Wellpower. Fisher said the company will not publicly disclose the economics, as with any vendor, but called it a multi-year agreement whose costs are in guidance and flow through G&A, or general and administrative expense.
CEO Tom Boyle said the tools are already used in investment committee decisions.
Fisher told a Truist analyst that, starting in the fourth quarter, the company will begin disclosing NSA same-store growth and operating metrics.
Sources
- Compared to Estimates, Public Storage (PSA) Q3 Earnings: A Look at Key Metrics — Yahoo Finance
- Is Public Storage (PSA) A Bargain After Its Earnings Beat And Raised Outlook? — Yahoo Finance
- Public Storage Q3 FFO Rises, Same-Store NOI Grows, 2026 Outlook Raised — Yahoo Finance
- Public Storage Q3 earnings grow amid reduced churn, guidance raised (PSA:NYSE) | Seeking Alpha — seekingalpha.com
- Public Storage (PSA) Stock Price, News, Quote & History - Yahoo Finance — Yahoo Finance
