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DATE
Friday, February 13, 2026 at 12 p.m. ET
CALL PARTICIPANTS
- Chief Executive Officer and Trustee — H. Boyle
- President and Chief Financial Officer — Joe Fisher
- Former Chief Executive Officer — Joseph Russell
TAKEAWAYS
- Core FFO per Share — $4.26 for the quarter and $16.97 for the year, reaching the high end of guidance.
- Same-Store Revenue Growth — Decreased 0.2% for the quarter; same-store NOI declined 1.5% in the same period.
- Expense Growth — Quarterly same-store expense growth was 4.2%, with property tax increases offset by benefits from payroll, utilities, and marketing optimization.
- Non-Same-Store NOI Growth — Increased 20% year over year, significantly driving Core FFO performance above stabilized same-store growth.
- Occupancy and In-Place Rents — In-place rents rose 20 basis points; occupancy fell 20 basis points versus the prior year.
- 2025 Acquisitions — $953 million acquired at stabilized yields in the high 6% range; $131 million acquired in the quarter; $7 billion of real estate underwritten for the year, but most did not transact.
- Development Pipeline — Year-end pipeline at $610 million with $416 million unfunded and targeted stabilized yields of 8%.
- Lending Business — $131 million deployed in 2025, with $142 million outstanding at a 7.9% current rate.
- Liquidity Position — $1.8 billion available from credit and cash, plus $600 million annual free cash flow.
- Leverage Metrics — Debt plus preferred equity to EBITDA at 4.2x; debt plus preferred equity to enterprise value in the low 20% range.
- Guidance for 2026 Core FFO — Initial range set at $16.35 to $17.00, with a midpoint decline of 1.7% due to negative same-store NOI and refinancing, partially offset by non-same-store NOI and tenant insurance gains.
- Same-Store 2026 Guidance — Revenue guided between minus 1.1% at the midpoint; NOI minus 2.2% at midpoint; occupancy expected roughly stable.
- Los Angeles Regulation Impact — State of emergency expected to persist through 2026, dragging same-store revenue by approximately 80 basis points.
- Move-In Rent Trends — January 2026 move-in rents declined 7%, a sequential improvement; company expects move-in rents to remain negative mid-single digits for the year but to improve as the year progresses.
- Personnel and Compensation Initiatives — Redesign of NEO incentive program focuses on per share and total shareholder return, with stretch goals and delayed vesting; further organization-wide incentive realignment is underway.
- Leadership Changes — Tom Boyle promoted to CEO and Trustee; Joe Fisher appointed President and CFO; several new C-suite leaders added; Shankh Mitra named Chairman; headquarters relocated to Frisco, Texas.
- Board and Executive Equity Actions — Shankh Mitra and Ron Havner purchased $25 million and $5 million, respectively, in out-of-the-money 10-year options with a 6-year lockout.
- Digital and AI Strategy — Over 85% of customers use self-help tools; ongoing enhancements to AI- and data-driven pricing, marketing, and customer experience under new leadership.
- Expense Controls — Payroll, utilities, and centralization efforts produced continued expense constraints; $4 million of transformation costs incurred to date within a $15 million to $20 million budget, aiming for $4 million run-rate benefit.
- Ancillary Revenue Growth — Tenant insurance and third-party management platforms remain growth drivers; lending platform expansion continues.
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RISKS
- Joe Fisher said, “Negative same-store NOI growth and refinancing activity is being offset by positive contributions from our non-same-store pool and our tenant insurance program,” indicating ongoing headwinds in core operating metrics.
- Persistent state of emergency in Los Angeles is guided to weigh on same-store revenue by about 80 basis points for 2026.
- Move-in rents are anticipated to stay negative in the mid-single digits for much of the year, with management only expecting improvement later in 2026.
- Expense guidance anticipates mid-single-digit property tax growth, though offset by other initiatives; ongoing regulatory attention cited related to California and emerging in New York.
SUMMARY
Public Storage (PSA 0.89%) reported full-year Core FFO per share at the high end of guidance and announced a broad leadership transition aligned with the launch of the PS4.0 strategic framework. Management detailed accelerated capital allocation ambitions across acquisitions, development, and lending, leveraging significant balance sheet resources and liquidity. The company anticipates further digital and AI integration, with over 85% of customer interactions through digital channels and a stated commitment to ongoing enhancements. Management reaffirmed negative same-store NOI and revenue trends in initial 2026 guidance, emphasizing external and ancillary growth as offsets. The Board and executive team demonstrated confidence by executing substantial long-term option purchases in PSA equity.
- Management introduced PS Next, an operating platform upgrade targeting organic growth acceleration and margin leadership with advanced data science initiatives.
- “non-same-store NOI is once again expected to be a significant contributor with year-over-year growth of 16% before factoring in future transaction activity,” according to Joe Fisher.
- Headquarters relocation to Frisco, Texas, aims to enhance talent access and operational efficiency, with transformation costs budgeted in previously disclosed figures.
- Joe Fisher stated, “if we utilized a same-store definition similar to our peers, 2025 NOI growth would have been positive 0.2% instead of the negative 0.5% reported,” clarifying metric comparability.
- Value creation will be pursued without reducing return hurdles, as acquisition constraints in recent years were linked to wide bid-ask spreads and external market factors, not company risk appetite.
- Regulatory risk is being actively monitored at the state and municipal level, especially concerning pricing practices and customer disclosure requirements.
- Active investment in employee incentives is set to align compensation directly with shareholder returns, with significant redesign at the NEO and organizational level already underway.
INDUSTRY GLOSSARY
- Core FFO: Funds from operations adjusted for nonrecurring and noncash items, serving as a primary REIT performance metric.
- NOI (Net Operating Income): Rental and related income less property operating expenses, excluding depreciation and certain other items.
- PS Next: Public Storage’s next-generation operating and customer experience platform centered on digital, data science, and AI initiatives.
- NEO: Named Executive Officer, referring to senior executives covered by company proxy filings and incentive plans.
- ECRI: Existing Customer Rate Increase, a pricing initiative applied to current tenants in the portfolio.
Full Conference Call Transcript
Joseph Russell: Thanks, Brandon. Good morning, and thank you for joining us. Today is a significant day for Public Storage. We’re here to discuss our fourth quarter and full year results, but more importantly, we’re unveiling PS4.0, the next era of Public Storage leadership and strategy. Tom, Joe and I will walk you through the full range of changes we’re making to drive accelerated performance and long-term value creation. Then we’ll open it up for your questions. Let me start with the leadership transitions and additions we announced yesterday. Succession planning has always been a top priority for our Board, and the objective has been crystal clear: place exceptional talent in every single leadership position at Public Storage.
I’m pleased to say we’ve met that objective. On the management side, I’m thrilled to announce Tom Boyle’s promotion to CEO and Trustee. Tom and I have been partners for nearly a decade since we both joined Public Storage in 2016. As you know, Tom has proven to be an exceptional leader in both his CFO and CIO roles with outstanding accomplishments across capital allocation, operations and financial strategy. Tom is more than ready to lead Public Storage into PS4.0. Our Board, management team and I could not be more confident in his skill, drive and vision. Congratulations, Tom. I’m also pleased to welcome Joe Fisher to the executive team as President and CFO.
Joe’s tenure at UDR as President, CFO and CIO, along with his stature in the REIT industry, made him an exceptional fit for our senior leadership team. Joe joins Public Storage at a great time and adds outstanding depth to our leadership ranks. Welcome, Joe. Tom will cover other significant leadership changes in a moment. At the Board level, Ron Havner is stepping down as Chairman after 15 years of iconic leadership and will continue as a Trustee. Ron is a legend in our industry and has been a tremendous mentor to me and the management team at Public Storage. I can’t thank him enough for his dedication and insight.
John Reyes, our former CFO and current Trustee, is retiring from the Board. John has guided Public Storage with nearly 3 decades of financial acumen and discipline. His impact on this company is immeasurable. And I’m excited to announce that Shankh Mitra, CEO of Welltower and an independent Public Storage Trustee for the last 5 years, will now take the role of Chairman. Shankh brings a proven track record of value creation, strategic clarity and leadership. We’re excited to have him guide and mentor the management team in his new role.
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