Public Storage

Core fundamentals beat expectations; outlook raised again for 2026 - Q3 core FFO: $4.34/share, +0.7% YoY (up while higher financing costs and G&A rose). - Same-store performance: revenue +0.5% YoY, NOI +0.5% YoY. - Key demand/price indicators improved: move-in rent increase ~+9% YoY (stated as strongest since Q2 2022), and move-in rates +28% vs Q4 2025. - Guidance raised for the 2nd time in 2026: core FFO to $16.90–$17.10/share (midpoint $17.00), + $0.10 / +0.6%. - Updated same-store outlook at the midpoint: revenue +0.25% and NOI -0.3% (improving +45 bps and +85 bps, respectively, vs prior outlook). - Management expectation remains: low single-digit move-in rent growth, and modestly positive YoY occupancy, with ECRI improving due to better churn.

Transition from “stabilization to recovery” driven by retention and supply moderation (not a major macro shift) - Demand described as uneven but improving: better customer retention, stronger new-customer pricing, and a more favorable supply backdrop as new construction slows. - Sequential momentum: same-store revenue accelerated +110 bps from Q2 to Q3 into positive territory. - Industry supply remains a regional risk: Sunbelt markets still pressured, but the company expects a recovery over time as supply declines; coastal/Midwest show more normalized revenue growth in the 2%–4% range. - Occupancy: described as ahead of prior year and roughly flat through October (suggesting stability near-term).

PS Next and AI (Ellie) scaling customer engagement—strategy viewed as demand-enabling, not demand-changing - Customer interactions are heavily digital: ~90% digital interactions, and ~3/4 of customers complete leases digitally. - AI agent “Ellie” has handled 300k+ customer interactions; capability is expanding. - Company explicitly frames AI as changing how customers discover/compare/engage, while storage demand remains need-based, local, physical—positioning Public Storage as advantaged by scale + digital platform + brand + customer experience. - Expectation: customers may increasingly interact via AI agents (Meta/Grok/Dots/etc.), and the company is “tuning” the experience to remain seamless across those channels.