8-KRegulation FD

Public Storage 8-K Report, Regulation FD Disclosure (Jun 2, 2020)

Filed June 2, 2020For Securities:PSAPSA-PRPSA-PFPSA-PGPSA-PHPSA-PIPSA-PJPSA-PMPSA-PNPSA-POPSA-PPPSA-PQPSA-PSPSA-PKPSA-PL

Summary

Public Storage (PSA) filed an 8-K on June 2, 2020, providing an operating update for the two months ended May 31, 2020. The company highlighted that its self-storage facilities are considered essential businesses and have remained open throughout this period. The update included key operating metrics for its "Same Store Facilities," which represent a significant portion of its U.S. portfolio. Despite the ongoing economic uncertainties, Public Storage reported no material degradation in rent collections, which is a critical positive indicator for the company's financial health during this time. While the company saw a decrease in both move-in and move-out customer volume, and a notable decline in the annual contract rent per square foot for new move-ins, overall square foot occupancy remained strong and slightly improved. The reduction in new tenant rent, coupled with a less significant decrease in rent for departing tenants, suggests potential pricing adjustments or promotional strategies being employed by the company to maintain occupancy levels. Investors will closely monitor these trends to assess the impact on future revenue and profitability.

Key Highlights

  • 1Public Storage's facilities are classified as "essential" and have remained open during the reporting period.
  • 2No material degradation in rent collections was observed for the two months ended May 31, 2020.
  • 3Square foot occupancy for same-store facilities increased slightly to 94.0% as of May 31, 2020, up from 93.6% a year prior.
  • 4Move-in customer volume decreased by 6.9%, with a significant 18.9% drop in the annual contract rent per square foot for new move-ins.
  • 5Move-out customer volume decreased by 6.5%, with a 3.8% decrease in the annual contract rent per square foot for move-outs.
  • 6Annual contract rent per occupied square foot declined by 1.9% year-over-year, indicating some pressure on rental rates.
  • 7The "Same Store Facilities" represent 2,224 facilities, comprising approximately 85% of PSA's U.S. consolidated self-storage portfolio.

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