Public Storage

Q3 operating momentum beat expectations; confidence rising (guidance raised) - Core FFO: $4.34/share, +0.7% YoY. - Same-store NOI & revenue: each +0.5% in the quarter. - Leading indicators strengthened materially: - Average move-in rent growth: +9% YoY (described as strongest since Q2 2022). - Move-in rate growth: +28% vs Q4 2025 (ahead of historical trends). - Churn improved (lower churn cited as reflecting better retention/customer obsession). - Occupancy: ahead of prior year; sequential acceleration in same-store revenue from Q2 to Q3 by +110 bps, turning positive. - Market backdrop: demand described as uneven, but better retention + moderating supply is improving conditions.

2026 outlook raised again; 2027 transition story emphasized - Core FFO guidance raised for the 2nd time in 2026: - New range: $16.90–$17.10/share (midpoint $17.00), + $0.10 (+0.6%) vs prior outlook. - At the midpoint assumptions: - Same-store revenue growth: +0.25% (turning positive). - Same-store NOI growth: -0.3% (still slightly negative at midpoint). - Assumes low single-digit move-in rent growth and modestly positive YoY occupancy, with better churn driving higher ECRIs. - Company framing: moving from stabilization → gradual recovery into 2027, especially as supply pressure should ease in many markets.

PS Next + AI initiatives: scaling customer experience while preserving the “physical storage” demand - Digital engagement is dominant: - ~90% of customer interactions digital - ~3/4 of customers complete leasing digitally - Ellie AI virtual agent: now handled >300,000 customer interactions. - Expectation: AI will increasingly mediate discovery/transactions through multiple interfaces (e.g., Meta/Grok/Dots and others), but AI doesn’t change the underlying need for physical storage—Public Storage is positioning for distribution/engagement advantages. - Investors takeaway: PS Next is presented as a core operating/economic engine (pricing + efficiency + customer experience), not just “tech investment.”