Public Storage

Greetings and welcome to Public Storage's first quarter 2025 earnings call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. At that time, if you'd like to ask a question, please press star 1 to enter the question queue. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ryan Burke, Vice President, Investor Relations and Strategic Partnerships.

Thank you, Rob. Hello, everyone. Thank you for joining us for our first quarter 2025 earnings call. I'm here with Joe Russell and Tom Boyle. Before we begin, we want to remind you that certain matters discussed during this call may constitute forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are subject to certain economic risks and uncertainties. All forward-looking statements speak only as of today, May 1st, 2025, and we assume no obligation to update, revise, or supplement statements that become untrue because of subsequent events. A reconciliation to GAAP of the non-GAAP financial measures we provide on this call is included in our earnings release. You can find our press release, supplement report, SEC reports, and an audio replay of this conference call on our website, publicstorage.com. We do ask that you initially limit yourselves to two questions. Of course, after that, if you have More, feel free to jump back in queue. With that, I'll turn the call over to Joe.

Thank you, Ryan, and thank you for joining us today. Tom and I will walk you through our Q1 performance, industry views, and outlook. Then we'll open it up for Q&A. Our performance during the quarter was in line with our expectations as we continued to drive stabilization across our portfolio. Move-in volumes increased over 2% as we drove more people to our website and increased customer conversion. With move-ins up and strong in-place customer behavior, the same-store occupancy gap to last year closed from down 80 basis points on December 31st to down 30 basis points on March 31st. Revenue growth in our same store pool turned positive and improved sequentially again after more than two years of deceleration from record growth in 2021 and 2022. Revenue growth in our non-same store pool, which comprises 520 properties and 21% of our portfolio, accelerated to nearly 11% as it continues to be an engine of growth. And all of this helped drive core FFO per share growth of more than 2% for the quarter, a 200 basis point improvement sequentially versus last quarter. We are well positioned due to our high quality portfolio, innovative platform, and company-wide competitive advantages. These include... our industry-leading revenue management consistently achieves the highest revenues per square foot in our markets. We are advancing the industry's most comprehensive digital transformation with customers choosing digital options for 85% of interactions and a new, more efficient operating model that includes using AI to staff our field more efficiently. Coupled with additional advantages across the public storage operating platform, this drives same-store operating margins meaningfully higher than the rest of our industry. And we have broad ancillary and external growth avenues, including acquisitions, development, redevelopment, domestic and international expansion, tenant insurance, third-party management, and lending. Our experienced acquisition and development teams are actively growing the portfolio. The $184 million we have acquired, or under contract as of today, is ahead of the $35 million achieved at this time last year. In total, our sizable non-St. Sir pool will deliver an additional $80 million of NOI through stabilization in 2026 and beyond. A recently announced proposal to acquire Abacus Storage King, one of the leading owner-operators in Australia and New Zealand, is a great example of our capabilities at play. As we demonstrated with SureGuard in Europe, we are uniquely positioned to execute on international growth. And all of this is enhanced by the industry's best balance sheet, which provides public storage both stability and the ability to execute on growth across economic cycles. Favorable industry dynamics benefit us as well. This is a needs-based business that is largely driven by customer events that happen in all economic conditions. Additionally, an evolving economy creates new customers as our demand drivers shift. With low nominal dollar rent, we are also affordable relative to the other space alternatives. This, coupled with the customer need, tend to make self-storage more resilient to changing economic conditions than many other industries. And it's important to keep in mind that our industry is already being normalized over the past three years. Movement rents have declined significantly due to softening demand and competitive market behavior. Our new customers are moving in at very affordable rents that are in line with levels not seen since 2013. We are in a good position to benefit from both rising rents and occupancy in an improving demand environment. Now I'll turn the call over to Tom. Thanks, Joe.