Public Storage (NYSE:PSA) used its fourth-quarter 2025 earnings call to outline a leadership transition and introduce “PS 4.0,” which management described as the company’s next era of strategy focused on accelerated performance and long-term value creation.
Leadership and board changes highlighted as “generational transition”
Outgoing CEO Joe Russell said the company’s board has prioritized succession planning with the goal of placing “exceptional talent” in key leadership roles. Russell announced that Tom Boyle has been promoted to CEO and trustee, noting their partnership since both joined the company in 2016. Russell also introduced Joe Fisher, former President, CFO and CIO of UDR, as Public Storage’s President and CFO.
Company frames recent performance and platform investments
Russell said that from 2023 to 2025 Public Storage led the sector in same-store revenue growth, NOI growth, and NOI margins, and cited 18.6% total shareholder returns over that timeframe. He also highlighted several multi-year initiatives:
- An omni-channel digital ecosystem where management said more than 85% of customers use self-help tools, with AI being introduced to improve conversion and costs.
- Completion of the “Property of Tomorrow” modernization and rebranding program, described as a $600 million investment across more than 3,400 properties, with solar on nearly half of the portfolio expected by the end of 2026.
- More than $12 billion invested to expand the portfolio by 763 assets, which management said are delivering “outsized growth.”
Russell also noted he is retiring from Public Storage and said Boyle and the team will continue the company’s approach of direct communication with investors.
PS 4.0 strategy: operating platform, value creation, and “own it” culture
Boyle said industry fundamentals have been strong over the long term but “haven’t been exciting for a few years,” and he characterized PS 4.0 as a strategic response rather than waiting for a rent inflection. He cited increased self-storage adoption, slowing new supply as development becomes “harder and more expensive,” and industry fragmentation that could drive transaction activity through generational transitions and institutionalization of ownership.
Boyle described PS 4.0 as built on three pillars:
PS Next operating platform: Boyle said PS Next is designed to deliver a fast, seamless customer experience across a scaled omni-channel platform, incorporating advanced data science and increasing use of AI. He said the goal is “organic growth acceleration” through revenue and expense performance, while also benefiting third-party management clients.
Value creation engine: Boyle said the company intends to allocate capital to improve the portfolio and accelerate per-share earnings and cash flow through acquisitions, development, expansions, and lending investments. He emphasized enhancing underwriting and targeting through data science and said the company’s balance sheet and approximately $600 million of retained cash flow provide “a capital opportunity each and every year.”
Own it culture: Boyle said the company is redesigning incentives, including a 2026 NEO program focused on per-share and total return outperformance. In Q&A, Boyle said the updated NEO plan is 100% performance-based, uses a multi-year performance period with delayed vesting, and focuses on total shareholder return in absolute and relative terms (including comparisons to storage peers and the RMZ), with “stretch goals.”
Boyle also detailed additional executive changes and hires tied to PS 4.0, including Joe Fisher (President and CFO), Aayush Basu (Chief Revenue and Marketing Officer), Gwen Montgomery (Chief Human Resources Officer), and promotions for Natalia Johnson (President, Chief Digital and Transformation Officer) and Chris Sambar (President and COO). The company also shifted its headquarters to Frisco, Texas, which Boyle said reflects its largest corporate presence, while maintaining a long-term Glendale, California office commitment.
Quarter results and 2026 outlook: pressure in same-store, strength outside same-store
Fisher reported fourth-quarter core FFO of $4.26 per share and full-year 2025 core FFO of $16.97 per share, which he said was at the high end of guidance. Same-store revenue and NOI in the quarter declined 0.2% and 1.5%, respectively. Fisher said move-in rent declines were offset by “strong existing customer performance,” with in-place rents up 20 basis points and occupancy down 20 basis points.
Fisher said expense growth remained contained, with fourth-quarter same-store expenses up 4.2%, as property tax growth was offset by payroll optimization, utilities, and marketing benefits. He highlighted non-same-store NOI growth of 20% and said this pool helped drive core FFO per share up 1.2% year over year. Fisher also noted that using a same-store definition similar to peers would have resulted in 2025 NOI growth of positive 0.2% instead of the reported negative 0.5%.
On external growth, Fisher said Public Storage acquired $131 million in the fourth quarter and $953 million in 2025, with deployment “diverse across size, geography, and seller type” at stabilized yields in the “high sixes.” He said development and expansion openings totaled $409 million during the year, with a $610 million pipeline at year-end targeting 8% stabilized yields, and $416 million remaining unfunded. The company’s lending platform deployed $131 million in 2025, bringing outstanding lending to $142 million at a current rate of approximately 7.9%.
Fisher said Public Storage ended the quarter with $1.8 billion of available liquidity (credit line plus cash) and about $600 million per year of annual free cash flow. He cited leverage metrics including debt plus preferred equity to EBITDA of 4.2x and debt plus preferred equity to enterprise value in the low-20% range.
For 2026, Fisher provided initial core FFO guidance of $16.35 to $17.00 per share (midpoint $16.68), implying a 1.7% year-over-year decline. Same-store revenue and NOI guidance midpoints were negative 1.1% and negative 2.2%, respectively, with occupancy expected to be roughly stable. Fisher said move-in rents are expected to remain negative in the mid-single digits for the year but improve over time, while tenant insurance and existing customer rate increases (ECRI) are expected to support revenue.
Fisher also said guidance assumes Los Angeles’ state of emergency remains in place throughout 2026, which he said would be an approximately 80-basis-point drag on same-store revenue. He added that reaching the high end of guidance would require the state of emergency to end sooner and for occupancy, move-in rates, and ECRI to perform slightly better.
Q&A themes: acquisitions pipeline, supply debate, AI-driven pricing, and cost initiatives
Management said it underwrote roughly $7 billion of potential acquisitions in 2025 and transacted on about $1 billion, with Boyle describing ongoing dialogue across single assets, small and mid-sized portfolios, larger portfolios, and continued evaluation of international opportunities. On seller expectations, Boyle said bid-ask disconnects remain in some cases, but he expressed optimism for more activity in 2026 and 2027 as cap rate ranges narrow. Management emphasized that PS 4.0 is intended to improve execution speed, targeting, and process—not to lower return hurdles.
On same-store cadence, Fisher said year-over-year revenue is backward-looking and that 2026 pressure reflects recent trends, including a more challenged move-in environment in the fourth quarter. He said new move-ins could be “the worst of 2026” in the first quarter but improve through the year, and he expects year-over-year revenue to start improving by the fourth quarter. He also discussed market bifurcation, citing coastal and certain Midwest markets performing around plus/minus 2% revenue growth, while Sun Belt markets (such as Dallas, Atlanta, and Florida) could be down a couple of percentage points but improve as supply dissipates and comparisons ease.
On supply, management disputed third-party data suggesting re-acceleration, saying it continues to see year-by-year decelerating deliveries and that development remains difficult due to approvals, costs, and underwriting constraints.
Boyle and Fisher also discussed AI and pricing, describing continued evolution in how the company uses machine learning and data science to attract customers, evaluate expected length of stay and price elasticity, and adjust pricing, promotions, and advertising to maximize NOI. Fisher said January move-in rents were down 7% year over year, which he characterized as sequential improvement.
On corporate costs and headquarters relocation, management said relocation, hiring, severance, and office-related costs are included in previously announced corporate transformation costs of $15 million to $20 million. Fisher said roughly $4 million has been incurred, with more expected in 2026, and cited an expected $4 million run-rate benefit from automation and offshoring efforts.
In discussing expenses, Fisher attributed guidance to continued initiatives across payroll, repairs and maintenance, utilities (including ongoing solar investments of roughly $50 million to $70 million per year), and centralization of certain functions. On regulation, management said it is monitoring pricing transparency developments, including recent activity in New York, while remaining focused on customer experience and compliance.
Boyle closed by saying management believes the opportunity ahead is strong and expects to share more about PS 4.0 as initiatives roll out over the coming year.
About Public Storage (NYSE:PSA)
Public Storage (NYSE: PSA) is a real estate investment trust (REIT) that specializes in self-storage services. Headquartered in Glendale, California, the company was founded in the early 1970s and has grown through development and acquisitions to become one of the largest owner-operators of self-storage facilities in the United States. It is publicly traded on the New York Stock Exchange under the ticker PSA.
The company’s core business is the ownership, operation and management of self-storage properties that serve both residential and commercial customers.
