Summary
Public Storage (PSA), a leading REIT in the self-storage sector, reported its 2017 fiscal year results in its 2018 10-K filing. The company, the largest owner and operator of self-storage facilities in the U.S., maintains a robust portfolio of 2,386 facilities across 38 states, in addition to significant investments in commercial properties through PS Business Parks (42% interest) and international self-storage through Shurgard Europe (49% interest). Financially, PSA demonstrated strong operational performance with consistent revenue growth driven by rental income increases in its Same Store Facilities. Despite facing increased competition and some market softness, particularly in major metropolitan areas with new supply, the company's strategy of improving existing property performance, strategic acquisitions, and development of new facilities continues to drive value. PSA also highlighted its strong credit metrics and access to capital, a crucial element for REITs that distribute most of their taxable income. Investors should note the company's ongoing commitment to its REIT status, its conservative capital structure, and its focus on operational efficiencies and brand recognition as key competitive advantages. The filing also details risks associated with real estate ownership, economic downturns, competition, and regulatory changes, all of which are carefully managed by the company.
Financial Highlights
36 data points| Revenue | $2.67B |
| Cost of Revenue | $707.98M |
| Gross Profit | $1.96B |
| Operating Expenses | $1.26B |
| Operating Income | $1.42B |
| Interest Expense | $12.69M |
| Net Income | $1.44B |
| EPS (Basic) | $6.75 |
| EPS (Diluted) | $6.73 |
| Shares Outstanding (Basic) | 173.61M |
| Shares Outstanding (Diluted) | 174.15M |
Key Highlights
- 1Public Storage is the largest owner and operator of self-storage facilities in the U.S., with a portfolio of 2,386 consolidated facilities representing 159 million net rentable square feet.
- 2The company has a diversified investment strategy, including a 42% equity interest in PS Business Parks (commercial real estate) and a 49% interest in Shurgard Europe (international self-storage).
- 3Same Store Facilities revenue increased by 3.0% in 2017 compared to 2016, primarily driven by higher realized annual rent per occupied square foot.
- 4Despite market softness and increased competition, particularly in major markets like Atlanta, Austin, and New York, the company's Same Store Facilities maintained strong occupancy levels (91.2% at year-end 2017).
- 5Public Storage maintained strong credit ratings ('A' by S&P, 'A2' by Moody's) enabling access to capital markets for its growth strategies, which include acquisitions, development, and improving existing operations.
- 6The company successfully issued $1.0 billion in unsecured notes in September 2017, diversifying its debt structure.
- 7A $7.8 million casualty loss was recorded due to Hurricanes Harvey and Irma, impacting costs but largely within insurance deductibles.