Skip to content
AnalystLens

Public Storage 8-K Report, Financial Results (Feb 20, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed February 20, 2024
Period End
February 20, 2024
In the record · 2016–202610-K1110-Q328-K159

PSA filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 159 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Apr ’17Apr ’17
  2. Leadership change8-K · Jul ’19Jul ’19
  3. Material agreement8-K · Jan ’22Jan ’22
  4. Material agreement8-K · Sep ’26Sep ’26

01—Abstract

Summary

Summary of the 8-K filed February 20, 2024. Cited figures are marked; the original filing is the authoritative source.

Public Storage (PSA) reported fourth-quarter and full-year 2023 results on February 20, 2024, highlighting record revenues and net operating income and the successful integration of the 127-property Simply Self Storage acquisition (closed September 13, 2023 for $2.2 billiona in cash).

Q4 net income allocable to common shareholders was $389.7 millionb, or $2.21 per diluted share, versus $2.06 a year earlier, while Core FFO was $4.20 per diluted share, up 1.0%. For full-year 2023, Core FFO was $16.89 per diluted share, up 6.1% (8.3% excluding the 2022 PS Business Parks contribution), and Same Store NOI grew 4.1% on direct NOI and 4.7% on NOI. Full-year GAAP net income fell to $11.06 per diluted share from $23.50, but this decline reflects the non-recurring $2.1 billion gain on the 2022 sale of the PSB stake, not operating weakness.

Operating trends were mixed beneath the headline numbers. Same Store revenue growth for the year was 4.7%c, driven by higher realized rent per occupied square foot (up 6.3%), but Q4 Same Store revenue rose only 0.8% as occupancy fell to 92.7% from 93.4% and marketing expense jumped 49.9%, pressuring margins. Q4 Same Store direct NOI declined 1.0%, and the company's 79.7% Same Store direct NOI margin compares with 81.1% a year earlier.

Year-end contract rent per occupied square foot rose 0.7%, and the company's external growth engine continued with 164 facilities added in 2023 and a 3.6 million square foot development and expansion pipeline. Looking ahead, management guided 2024 Core FFO per share to $16.60d-$17.20, implying growth of -1.7% to +1.8% from 2023.

Same Store NOI is guided to decline 2.4% to grow 0.7%, with revenue growth of -1.0% to +1.0% and expense growth of 2.0% to 3.5%, reflecting a soft rate environment and elevated costs. Investors should weigh the strong balance sheet and growth pipeline against the flat-to-modest 2024 outlook and the company's sensitivity to occupancy and marketing spend.

02—Key points

Key Highlights

  1. Full-year 2023 Core FFO of $16.89 per diluted share, up 6.1% year over year (8.3% excluding the PSB contribution in 2022).
  2. Q4 2023 Core FFO of $4.20 per diluted share, up 1.0% from $4.16 in Q4 2022.
  3. Same Store NOI grew 4.7% for the full year on 4.7% revenue growth, but Q4 Same Store direct NOI fell 1.0% as occupancy declined to 92.7% and marketing expense rose 49.9%.
  4. Acquired the Simply Self Storage portfolio (127 facilities, 9.4 million net rentable sq. ft.) for $2.2 billion in cash, plus 37 other facilities for $473.2 million, adding 164 facilities in 2023.
  5. 2024 guidance calls for Core FFO of $16.60-$17.20 per share and Same Store NOI growth of -2.4% to +0.7%, signaling a flat-to-modest outlook.
  6. GAAP net income per diluted share fell to $11.06 from $23.50, primarily due to the non-recurring 2022 gain on the PS Business Parks stake sale rather than operating deterioration.
  7. Development and expansion pipeline of 3.6 million net rentable sq. ft. at an estimated $766.2 million, with $420.7 million of remaining costs expected over the next 18-24 months.

03—Questions

Frequently Asked Questions

  1. How did Public Storage perform in the fourth quarter of 2023?

    Q4 2023 net income allocable to common shareholders was $389.7 million, or $2.21 per diluted share, up from $2.06 in Q4 2022. Core FFO was $4.20 per diluted share, up 1.0%. Same Store revenue rose 0.8% and Same Store direct NOI declined 1.0%, as occupancy fell and marketing costs rose sharply.

  2. Why did GAAP earnings per share decline so sharply for full-year 2023?

    Full-year 2023 GAAP EPS of $11.06 compared with $23.50 in 2022, largely because 2022 included a $2.1 billion gain on the sale of the PS Business Parks equity investment. Core FFO, which excludes such gains, rose 6.1% to $16.89 per share, so the decline is mainly non-recurring rather than operational.

  3. What does the 2024 guidance imply for investors?

    The company guided 2024 Core FFO to $16.60-$17.20 per diluted share, roughly -1.7% to +1.8% versus 2023. Same Store NOI is projected between -2.4% and +0.7%, with revenue growth of -1.0% to +1.0% and expense growth of 2.0% to 3.5%, suggesting limited near-term earnings growth as the company works through softer pricing and higher costs.

  4. How significant was the Simply Self Storage acquisition?

    The Simply acquisition, closed September 13, 2023, added 127 facilities (9.4 million net rentable sq. ft.) for $2.2 billion in cash and was funded through $2.2 billion of unsecured senior notes. Since acquisition, the portfolio generated $44.4 million in revenue and $29.4 million in NOI in 2023, with 87.7% average occupancy, so its contribution to 2023 results was partial and its full-year effect will show in 2024.

  5. What are the main risks highlighted by the results?

    Key concerns include declining Same Store occupancy (92.7% in Q4 versus 93.4% a year earlier), margin compression from a 49.9% jump in marketing expense, rising interest expense ($201.1 million for 2023 versus $136.3 million in 2022), and the modest 2024 outlook. Foreign currency losses tied to Euro-denominated notes also affect GAAP earnings, which is why management emphasizes Core FFO.

04—Continue

← View all 8-K filings