Public Storage buys into Canada with $1.2B deal
The self-storage operator reported first-quarter net income of $2.71 a share, up 33% from a year earlier.
Public Storage (PSA) expanded its footprint into Canada with a $1.2 billion acquisition, marking a strategic shift as the self-storage real estate investment trust reported mixed first-quarter results. The deal for Public Storage Canada, which includes 68 properties totaling 5.3 million square feet, is expected to deliver a going-in net operating income yield in the high-5% range and high-single-digit NOI growth near-term. The move follows the company’s $10.5 billion acquisition of National Storage Affiliates in March, underscoring a push to accelerate external growth through acquisitions and developments.
Net income per share rose 32.8% year-over-year to $2.71 in the first quarter, outpacing the 2.4% growth in Core funds from operations per share to $4.22. The divergence reflected a deceleration in operational performance, as Core FFO growth slowed sharply from 18.3% in the prior-year period. Same-store net operating income margin expanded by 0.4 percentage points to 77.1%, while average occupancy ticked up 0.4 points to 91.5%. However, realized annual rental income per occupied square foot declined 0.3% to $22.00, signaling pressure on pricing power.
Non-same-store net operating income grew 27.5% year-over-year, accelerating from 24.8% revenue growth in the segment, as lease-up performance improved. The company reaffirmed its 2026 guidance, expecting same-store NOI to decline between 3.9% and 0.5% and Core FFO per share to range from $16.35 to $17.00. The National Storage Affiliates acquisition is projected to add $0.35 to $0.50 to Core FFO per share at stabilization, though the full impact will take time to materialize.
Public Storage also unveiled PS4.0, a strategic overhaul that includes the relocation of its corporate headquarters to Frisco, Texas, and the launch of PS Next, a next-generation operating platform aimed at improving customer experience and efficiency. The initiative coincided with a leadership transition: Tom Boyle succeeded Joe Russell as CEO on April 1, while Shankh Mitra was appointed non-executive chairman, replacing Ron Havner. The company introduced a new executive incentive program tied to shareholder returns, and Mitra and Havner invested $25 million and $5 million, respectively, in 10-year out-of-the-money options with a $350 strike price.
The acquisitions and strategic shifts are expected to reshape Public Storage’s portfolio, with 38% of pro forma NOI now concentrated in Sunbelt markets, up from 37% pre-acquisition. The company also announced a joint venture with NSA unitholders for 313 properties, retaining an 80% ownership stake for unitholders and a 20% stake for Public Storage. Management said it targets $110 million to $130 million in run-rate synergies within three to four years, though the timeline remains fluid.