8-KRegulation FDOther Events

Public Storage 8-K Report, Regulation FD Disclosure (Sep 7, 2021)

Filed September 7, 2021For 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 September 7, 2021, to disclose an investor presentation containing operating data for the two months ended August 31, 2021. The key takeaway for investors is the significant increase in rental rates for new move-ins and existing occupied units, indicating strong pricing power in the self-storage market. Despite a slight decrease in the total square footage moved in, the average annual contract rent per square foot for new move-ins surged by 25.2% compared to the prior year. Furthermore, occupancy levels remained robust at 95.9%, a 1.4% increase year-over-year, while the average annual contract rent per occupied square foot also saw a healthy 9.7% rise. This data suggests a favorable market environment for Public Storage, characterized by strong demand that allows for significant rent increases, which should translate into improved revenue and profitability for the company.

Key Highlights

  • 1Investor Presentation released on September 7, 2021, containing operating data for the two months ended August 31, 2021.
  • 2Annual contract rent per square foot for new move-ins increased by 25.2% to $18.71 (compared to $14.95 in 2020).
  • 3Annual contract rent per square foot for move-outs increased by 18.2% to $18.13 (compared to $15.34 in 2020).
  • 4Square foot occupancy at August 31, 2021, was 95.9%, up 1.4% year-over-year.
  • 5Annual contract rent per occupied square foot at August 31, 2021, was $19.39, up 9.7% year-over-year.
  • 6The data pertains to 2,278 same-store facilities, representing approximately 81% of PSA's U.S. self-storage portfolio.
  • 7Annual contract rent excludes certain fees and promotional discounts, and does not reflect uncollectible rents.

Frequently Asked Questions

The main purpose of this 8-K filing is to disclose an investor presentation that Public Storage intends to use at an upcoming investor conference. This presentation includes an operating update for the two months ended August 31, 2021.

The key trends indicate strong pricing power. There was a significant increase in the average annual contract rent for both new move-ins (25.2% higher) and existing occupied units (9.7% higher). Occupancy also improved slightly.

While the square footage moved in decreased by 12.2% and square footage moved out decreased by 6.1%, the average rental rates for both new move-ins and occupied units saw substantial increases. This suggests that the company is prioritizing rental rate growth over volume, or that demand is strong enough to support higher prices.

The 'Same Store Facilities' include 2,278 facilities owned and operated on a stabilized basis since January 1, 2019. This subset represents approximately 81% of the company's total U.S. self-storage square footage as of June 30, 2021, providing a good representation of the core operational performance.