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DATE

Tuesday, April 28, 2026 at 12 p.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — H. Thomas Boyle
  • Chief Financial Officer — Joe Russell Fisher

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TAKEAWAYS

  • Core FFO per share -- $4.22, up $0.10 or 2.4% year over year, driven by higher same store NOI and non-same store growth.
  • Same store NOI growth -- Positive 0.4%, with same store revenue flat and occupancy up 0.4% compared to internal projections of flat for the year.
  • Move-in rent growth -- Minus 2.4%, outperforming prior expectations of mid-single-digit declines, with management guiding that rates would improve throughout the year.
  • Expense growth -- Down 1.1% year over year, supported by a $3 million property tax appeal benefit and lower payroll, repair and maintenance, utilities, and marketing expenses, attributed in part to PSNext initiatives.
  • Non-same store NOI growth -- 27% increase, combined with 12% ancillary income growth, contributing materially to overall quarterly results.
  • Portfolio acquisitions -- Year-to-date acquisition or contracts totaling $186 million, mainly off-market, with most activity in targeted micro markets aligned with the PSNext platform.
  • Development pipeline -- $618 million in total, with $45 million opened during the quarter, $416 million unfunded, and stabilized yield targets around 8%.
  • Lending platform -- $143 million outstanding loans at a 7.9% rate at quarter end, with business expected to grow gradually, enhancing platform value and providing complementary revenue streams.
  • Liquidity -- $1.3 billion available between line of credit and cash at quarter end, plus about $600 million in annual free cash flow; subsequent $500 million 10-year unsecured notes issued at 5% to further enhance liquidity.
  • Leverage metrics -- Debt to EBITDA at 2.9 times; debt plus preferred equity to EBITDA at 4.2 times; debt plus preferred equity to enterprise value in the low-20% range according to management.
  • NSA acquisition -- Public Storage (PSA 2.86%) to wholly own 46% of over 1,000 assets in the National Storage Affiliates (NYSE: NSA) portfolio, with the rest held through joint ventures; management expects $110 million to $130 million in total synergies and over $1.5 billion in value creation following a $10 billion transaction.
  • Synergy timing and accretion -- NSA deal expected to break even in 2026, reaching $0.35 to $0.50 per share earnings accretion by stabilization in 2028–2029 as guided by management.
  • Guidance -- No upward revisions despite outperformance; management notes "busy season" ahead and maintains full-year guidance with revenue growth projected to soften midyear before sequential improvement.
  • Operational trends -- First quarter showed lower move-ins, improved move-in rates over expectations, materially reduced churn, and improved occupancy versus last year; April trends continued these patterns per management comments.
  • LA state of emergency impact -- Management assumes a full-year negative 80 basis point impact to same store revenue due to extensions of the Los Angeles state of emergency, preventing rental rate increases in that market.
  • New supply and market dynamics -- Sunbelt markets face ongoing supply pressures, while coastal and Midwest regions are experiencing stronger growth; new supply in challenged markets is tapering and being absorbed sequentially, with development barriers rising nationally.
  • PSNext platform -- Enhanced digital and data science capabilities are being leveraged for targeted marketing, pricing optimization, and efficiency; new leadership in revenue and marketing is driving data-driven customer acquisition strategies.
  • Welltower partnership -- The recently announced strategic data science collaboration aims to improve micro market targeting and portfolio construction, complementing internal analytics expertise.

SUMMARY

Management introduced the PS 4.0 strategic vision, emphasizing a value creation engine powered by scale, branding, and advanced analytics. The NSA deal marks a foundational step in this strategy, structured for joint venture optimization and major synergy promise, with integration set for the third quarter. Current quarter operations benefited from a material reduction in customer churn, improved rent trends, and strong expense control, resulting in solid FFO growth and higher-than-expected occupancy, yet full-year guidance remains unchanged as the team heads into seasonal demand peaks.

  • H. Thomas Boyle stated that PSNext's digital-first approach is designed to outperform across diverse market conditions, aligning customer experience and operational efficiency for both new and existing assets.
  • Integration plans for National Storage Affiliates are advancing with immediate adoption of PSNext, expected to generate $110 million to $130 million in synergies over time and significant future accretion.
  • The Welltower strategic data science partnership is anticipated to drive incremental advantages in capital deployment and portfolio management that could reinforce competitive lead in targeted markets.
  • Geographic performance remains mixed, with Sunbelt supply pressure ongoing and Los Angeles constrained by regulatory barriers, but management views future recovery as a "strong tailwind" once conditions resolve.
  • The lending segment, while not a swing factor for 2026 guidance, is positioned for gradual growth to as much as $1 billion, bringing ancillary business benefits including future acquisitions and property management opportunities.

INDUSTRY GLOSSARY

  • Core FFO: Core Funds from Operations; a measure of REIT earnings that excludes gains, losses, and certain non-cash items to present recurring operating performance.
  • NOI: Net Operating Income; a key profitability metric representing income after operating expenses, before interest and taxes, for a real estate asset or portfolio.
  • PSNext: Public Storage’s proprietary operating platform, leveraging technology, analytics, and digital-first processes for customer service, pricing, and operational integration.
  • PS 4.0: Public Storage’s strategic initiative focused on accelerating value creation through culture, brand scale, analytics, and operational innovation.
  • NSA: National Storage Affiliates, a major self-storage REIT being acquired by Public Storage in a joint venture structure.
  • ECRI: Existing Customer Rate Increase; periodic rent hikes for current tenants in self-storage properties.

Full Conference Call Transcript

H. Thomas Boyle: Good morning, everyone, and thank you for joining us. I will frame my comments around four points. First, the PS 4.0 era is now underway, with the new team in place and our Own It culture gaining momentum. Second, the announced acquisition of National Storage Affiliates (NSA) is an important early milestone in that strategy. Third, our operating platform, PSNext, is strengthening the customer experience while also improving how we run the business, with first quarter results in line to a touch better than expectations. And fourth, even ahead of the forthcoming recovery in storage fundamentals, we are continuing to invest behind a broader value creation engine that we believe can drive stronger per share growth over time.

Let me start with PS 4.0. What PS 4.0 is really about is building the next phase of Public Storage around a simple idea: we have a unique opportunity to create value by combining the scale of our platform, the strength of our brand, the quality of our portfolio, our unique Own It culture, and increasingly the advantage of our data and analytics capabilities. We hosted our 160-person leadership team a few weeks ago to kick off the new era, with an enthusiastic response internally. Our teams have embraced the strategic vision, and there is real energy across the organization around what comes next. That matters because strategy only creates value if the organization is aligned behind it.

Right now, that alignment is getting tighter. The energy is being translated into urgency for execution. That takes me to point number two: NSA. The announced acquisition of National Storage Affiliates is a major step forward for us and a very clear example of PS 4.0 in action. When we discussed the transaction in March, we highlighted three things. One, the portfolio combination is compelling. The two portfolios deepen our brand, scale, and operating presence across the national opportunity set. Two, there is meaningful upside from bringing that portfolio onto our platform. On the M&A call, we discussed the customer experience opportunity with managing the properties under the Public Storage brand and PSNext operating model.

This will also lead to revenue potential and margin upside. And three, we structured the transaction with a win-win joint venture that optimizes portfolio structure for Public Storage and preserves financial strength. Public Storage will wholly own 46% of the over 1 thousand assets in the portfolio, with the remaining in joint ventures. Importantly, the transaction maintains our industry-leading balance sheet. When I step back and look at the NSA acquisition, I do not see a bigger company; I see a stronger platform, a deeper portfolio, and a broader opportunity set for value creation. This will drive differentiated per share earnings growth in coming years. Integration planning is progressing well.

The teams are engaged, the workstreams are moving, and we are preparing the business to execute well upon closing. I also want to thank both the NSA and Public Storage teams. Transactions like this require an enormous amount of focus, coordination, and professionalism. We appreciate the strong collaboration we are already seeing across both organizations. There is obviously much more to come as we work toward completion, but I am encouraged by the work that is underway. That leads to point number three: the operating platform. A big part of why we are excited about NSA is that PSNext is built for this.

PSNext is an operating platform that is increasingly shaping how we serve customers, price inventory, manage demand, and drive efficiency across the business. Customers are increasingly interacting through digital channels—whether through our website, app, agents, and over time, more through large language model–driven interfaces. We are building our operating model around those shifting customer expectations. That customer focus is central to PS 4.0. The team is aligning in this direction. Let us connect that strategy to what we are seeing in the business today. The operating environment remains uneven. We are seeing lower customer move-in activity overall in the first quarter, with some weather impacts and modest demand.

At the same time, we have driven better rental rates than expected, and importantly, our existing customer base remains very healthy. Move-out activity was meaningfully lower in the quarter, leading to better occupancy than last year. This is not a one-speed environment; it is a market where execution matters. That is where the operating model transformation becomes so important. We are improving customer experience in a way that supports performance both on the revenue side and the expense side. We are seeing that playbook continue to develop, and that gives us confidence not just in integrating NSA, but improving the performance of the broader portfolio over time. Now point number four: the value creation engine.

We are not waiting for the environment to get easier. We are acting now. We have confidence in the long-term fundamentals of storage and have the opportunity to invest today to benefit the platform over time. That mindset is important because while the near-term environment remains uneven, the longer-term setup is compelling. Several longer-term drivers support that optimism. Self-storage adoption has increased over the last decade. Participation has broadened across customer cohorts, with strong participation from younger generations. Our units present an affordable space solution in a high cost-of-living environment. Competitive supply is slowing as new development becomes harder and more expensive. We like that backdrop, and we are positioning the company now to outperform as the environment improves.

NSA is the first major milestone of our value creation engine, but it is not the only one. We continue to execute upon value creation through multiple levers—acquisitions, development, expansion efforts, and our lending platform. Our capital will be allocated across those levers in order to: one, improve our portfolio; two, accelerate per share earnings and cash flow; and three, compound our returns. Our external growth and capital allocation capabilities continue to build. In March, we announced the strategic data science partnership with Welltower. That partnership brings together Welltower’s capital allocation–oriented data science platform and Public Storage’s operational pricing and customer analytics capabilities to better our micro market targeting and portfolio construction over time.

Our value creation engine is driven by a combination of our PSNext operating platform advantages, enhanced data science approach, and team investments. To summarize the quarter: one, we launched PS 4.0 and aligned the organization toward a new strategic vision; two, we announced the NSA acquisition, which—with a unique structure—strengthens our scale, our platform, our portfolio, and our value creation opportunity; three, we continued advancing PSNext in our operating model transformation with a strong focus on customer experience; and four, we expanded the reach of our value creation engine through both external growth and the Welltower data science partnership. We are realistic about the operating environment—it remains uneven.

But we are also optimistic about the demand and supply setup over the next several years, about the capabilities we are building, and about our ability to translate those investments into stronger per share earnings growth over time. With that, let me turn it over to Joe.

Joe Fisher: Thank you, Tom, and good morning, everyone. The topics I will cover today include our first quarter results, a summary of recent transactions, and a balance sheet and capital markets update. Core FFO in the quarter was $4.22 per share, up $0.10 per share, or 2.4% year-over-year. These results were driven by better-than-expected same store NOI and significant growth from our non-same store portfolio and ancillary income initiatives. Same store revenue and NOI growth in the quarter were flat and positive 0.4%, respectively. Move-in rents, while still negative, came in better than expected at minus 2.4% versus full-year expectations of down mid-single digits, which had been expected to start the year lower and improve throughout the year.

Occupancy was positive year-over-year by 0.4% versus guidance assumed at flat for the year. Lastly, our existing customers continue to perform well, as demonstrated by a material reduction in churn. We continue to see a market that is mixed by geography. In a number of Sunbelt markets, new supply continues to weigh on performance and pressure revenues, but at the same time, we are seeing strong growth in many of our coastal and Midwest markets. Lastly, Los Angeles continues to be hindered by the state of emergency, with the most recent extension through May. As a reminder, we have assumed the state of emergency remains in place all year at a negative 80 basis point impact to same store performance.

But given the quality of our portfolio, low supply, high occupancy, and strong performance in other Southern California markets, LA will be a strong tailwind for performance in the future. Expense growth performed very well at minus 1.1% for the quarter. In property tax, we did see earlier-than-expected appeal wins of approximately $3 million in the quarter, which we had previously expected in the second quarter. Away from property tax, PSNext helped drive negative growth in payroll, R&M, utilities, and marketing. Outside of the same store pool, NOI growth of 27% in our non-same store pool and ancillary growth of 12% lifted results.

Non-same store performance and our external value creation engine continue to be a substantial and repeatable driver of shareholder value. If we utilized a same store definition similar to that of peers, NOI would have been 50 basis points better in the quarter. While we are pleased with our results, having started the year ahead of our expectations, we have not adjusted our guidance at this time, with busy season still ahead of us. As we spoke about in our initial guidance, the leading indicators of our business remain positive, but year-over-year revenue growth as a lagging indicator will soften midyear. Onto transactions. Year-to-date, we acquired or are under contract for $186 million.

The first quarter is typically a slow quarter for external growth. However, we continue to see opportunities that are a great fit for our PSNext operating platform and expect to have more activity to discuss in the second quarter. On the development and expansion front, we had openings of $45 million during the quarter. The development pipeline stands at $618 million with stabilized yields targeting 8% and remaining amounts unfunded of $416 million. For our lending business, we had $143 million outstanding at a current rate of approximately 7.9%. Lastly, our fortress balance sheet remains in excellent position from both a metric and liquidity perspective.

At quarter-end, we had available liquidity of $1.3 billion between our line of credit and cash on hand, plus approximately $600 million of annual free cash flow. Subsequent to quarter-end, we issued $500 million of well-priced 10-year unsecured notes at 5%, with proceeds utilized to pay down our revolving credit facility and improve liquidity. Our balance sheet remains one of the strongest in the REIT sector, with debt to EBITDA of just 2.9 times, debt plus preferred equity to EBITDA of 4.2 times, and debt plus preferred equity to enterprise value in the low-20% level. In summary, we are encouraged by our start to the year and by the opportunities we see ahead.

We delivered solid results, maintained a fortress balance sheet, and continued to execute against our capital allocation priorities. We remain disciplined on deployment, constructive on the long-term fundamentals of the business, and confident in our ability to drive per share value creation. I would like to turn the call back to the Operator to open up for Q&A. Thank you.

Operator: Thank you. At this time, we will be conducting a question-and-answer session. As a reminder, please limit yourself to two questions. A confirmation tone will indicate your line is in the question queue. Our first question comes from Michael Goldsmith with UBS. Your line is now live.

Michael Goldsmith: Good morning, good afternoon. Thanks for taking my questions. Joe, in your prepared remarks, you talked about a material reduction in churn during the quarter. Can you talk a little bit more about that specifically? Was that just in the month of March or throughout the quarter? What do you think is driving that, and what is the impact on the financials from a material reduction in churn?

Joe Fisher: Hey, Michael. Good afternoon. Good question, and definitely a good statistic to highlight for us, as we have been very encouraged by the existing customer dynamic and them staying with us longer. We did see a pretty material reduction in churn and move-outs coming down in the quarter. In terms of what is driving that, I think it is a multitude of factors. One, we are seeing good pay rates and minimal delinquency from the existing customer and an ability to continue to pay those ECRIs as they come through. The health of the overall customer is strong at this point in time.

At the same time, from a customer experience standpoint and focus on that experience and length of stay, as part of PS 4.0 we have talked a lot about the customer obsession. The teams are laser-focused right now on customer experience to ensure we deliver a good product and a good experience overall. Hopefully that results in a longer length of stay for us. From an economic perspective, that existing customer is more profitable for us. The more that we can hold onto that individual, and have less inventory available to sell going forward, that helps pricing on the new side as well, and you saw that move-in rate come up materially and ahead of expectations in the first quarter.

Michael Goldsmith: As a follow-up, can you talk about what you have seen through April? I know we are lapping Liberation Day. Just trying to get a sense of the latest operating metrics.

H. Thomas Boyle: Sure, Michael. We saw similar trends in April to what we saw through the first quarter—better churn year-over-year, so lower move-out volume; lower move-in volume; occupancy flat to a touch better; and improving trends as it relates to move-in rates—move-in rates flat to a touch positive through the month of April. Busy season is here and just getting started. We have a busy stretch ahead in May, June, and July. The team is ready, and we look forward to updating you on second quarter activity as we move forward.

Michael Goldsmith: Thank you very much. Good luck in the second quarter.

H. Thomas Boyle: Thanks, Michael.

Operator: Our next question comes from Samir Khanal with Bank of America. Your line is live.

Samir Khanal: Good morning, everybody. Joe, should we think about the cadence of revenue growth here? As we think about the next few quarters, you are tracking well above the midpoint in the first quarter. Help us unpack revenue growth. And secondly, how should we think about your investment activity this year, excluding NSA, and maybe comment on the lending platform?

Joe Fisher: Hey, Samir. I would bifurcate that into two pieces—leading indicators and lagging indicators. On the leading side, we started off the year really well across the board—move-in rates, churn, occupancy, etc. We feel really good on that front. What we communicated in our original guidance was that year-over-year revenue, as a lagging indicator, does get a little bit worse before it gets better. We had some pressures in third and fourth quarter of last year that flow into the year-over-year number as we get into 2Q and 3Q. So we do expect year-over-year revenue to come down a little bit. But sequentially, we continue to be positive in terms of those trends Tom just talked about going through April.

H. Thomas Boyle: On the transaction market, we are seeing similar trends to last year, which was encouraging—a broadening of the seller set, a combination of single one-off transactions as well as some smaller portfolios. The first quarter tends to be a little quieter seasonally, so I would expect that transaction volume picks up as we move through the year. A more stable interest rate environment, more stable operating trends, and a broadening seller set all point to encouraging trends. As Joe highlighted, we have acquired or are under contract for around $200 million year-to-date in acquisition activity, driven by our investments in capital allocation capabilities—building the team, enhancing data science, and utilizing the PSNext operating platform to drive differentiated cash flow.

We are built for the small one-off transactions, which is where we have been most active year-to-date. About three-quarters of the activity has been off-market. We are targeting micro markets that fit well for the portfolio. The balance sheet is poised to support that level of activity, and we will keep going from here.

Joe Fisher: On lending, this continues to be a growing part of the business. It was a slow start to the year, but we expect it to continue to grow over time and significantly enhance both the value creation and the size of the platform. Demand for lending is a little lighter right now, which, given the backdrop of lower development starts and lower supply, is a net long-term positive for the industry. It is also competitive among lenders making new loans. We remain disciplined on rate and underwriting metrics. We have not deviated to date. We may miss a few deals because of that, but we think that is in the long-term interest of shareholders.

From a guidance perspective, there is no big implication to this year whether we are more or less aggressive on external growth. The focus is on compounding per share earnings into 2027–2028 and setting up the growth profile there, not a big swing factor for 2026.

Samir Khanal: Got it. Thank you.

Operator: Our next question comes from Todd Michael Thomas with KeyBanc Capital Markets. Your line is now live.

Todd Michael Thomas: Thanks. First, a follow-up on revenue cadence. Would the pressure you anticipate on same store revenue growth in 2Q and 3Q—absent LA—still be there, or could stronger coastal and Midwest markets carry the recovery more evenly through the balance of the year?

Joe Fisher: Hey, Todd. It would come off a little bit in both coastal and Sunbelt in 2Q and 3Q. You saw some broader-based weakness back in 3Q and 4Q of last year when new move-in rates went more negative than where we are today. It is a bit more broad-based in 2Q and 3Q. It is not material, but it is expected to be slightly lower than the first quarter. On LA, the state of emergency is still in place through May. In guidance, we factored it in for the entire year, at minus 80 basis points to same store revenue for the full year.

Because of timing and comps, LA on a same store revenue basis does continue to get worse throughout the year if the state of emergency remains in place. We do not have insights one way or the other on timing. As I said, it should be a material tailwind to recapture market rent growth in the future.

Todd Michael Thomas: Thanks. And on NSA integration, can you talk about measures to ensure NSA’s operations during peak leasing season are intact—leasing, revenue management, etc.—and any incremental thoughts on expected revenue or expense synergies as you work toward closing?

H. Thomas Boyle: We have been encouraged by the dialogue and collaboration between the National Storage team and the Public Storage team. We are developing deep plans to integrate the properties as we move into the third quarter. In the interim, they are running their business well and we are doing the same. As we discussed on the M&A call last month, the plan is to integrate those assets immediately onto the PSNext platform, start the rebranding process, welcome their customers and employees, and get going in the third quarter. We will share more as we get closer.

Joe Fisher: No change to synergy timing and value creation versus what we put out in early March. We still expect $110 million to $130 million of synergies over time. From an accretion perspective, 2026 is expected to be breakeven. By stabilization in 2028–2029, we think we will have $0.35 to $0.50 of per share earnings compounded on top of our existing profile. At our multiple, we had talked about total value creation of over $1.5 billion coming off a 10 billion transaction. We are excited to get going on the integration and prove the upside we have outlined.

Todd Michael Thomas: Great. Thank you.

Operator: Our next question comes from Eric Jon Wolfe with Citi.

Nicholas Joseph: Thanks. It is Nick Joseph here with Eric. As part of the structure of JV in certain properties and full ownership of others, is there a difference in occupancy between those properties going into the JV versus what will be wholly owned? And is there any difference in stabilization that would drive different return profiles?

H. Thomas Boyle: No. There is pretty similar occupancy between the different pools today. Both sets of assets have been owned by NSA for a period of time, and occupancies are in a similar place. As we thought about the formation of the joint venture—creating a win-win and a different return profile for the JV compared to on-balance-sheet—the drivers were more around market mix and composition rather than occupancy.

Nicholas Joseph: Got it. Thank you.

Operator: Our next question comes from Nicholas Philip Yulico with Scotiabank. Please proceed with your question.

Nicholas Philip Yulico: Thanks. Looking at average occupancy in same store versus where you ended on occupancy, the year-over-year delta is different—not as much occupancy growth at period end versus year-over-year in the fourth quarter. Did something happen in March—were you pushing prices and saw some occupancy loss? Can you unpack that?

Joe Fisher: Hey, Nick. From an occupancy perspective, we came in quite a bit better than expected in the first quarter given the lower move-out activity we saw. One thing you might be referring to is the change if you look at same store occupancy in fourth quarter 2025 versus first quarter 2026. It did come down a little sequentially, but we added about 17 million square feet into the same store pool from 2025 to 2026, predominantly weighted toward Sunbelt markets, which are running a little lower from an occupancy perspective. If you are thinking about 4Q versus 1Q, I would not read much into that. Focus on the year-over-year momentum we are seeing.

Nicholas Philip Yulico: The follow-up is that the year-over-year delta in ending occupancy in 1Q versus 4Q showed lower year-over-year growth at ending. Anything late in the quarter that impacted March ending occupancy?

H. Thomas Boyle: There was not anything in particular toward the end. As Joe mentioned, we were encouraged by lower churn through the first part of the year, and our models adapted to that, which led to a little more pricing power as we moved through the quarter. Through the quarter, churn was helpful, rates improved, promotions were down, marketing was down, and occupancy was up year-over-year—encouraging leading indicators as we move forward.

Nicholas Philip Yulico: That is helpful. Thanks.

Operator: Next question is from Brendan James Lynch with Barclays. Your line is now live.

Brendan James Lynch: Thanks for taking my questions. Tom, following up on churn being lower year-over-year, could you discuss some of the initiatives driving that outcome and how much is in your control given most customers are not generally moving out to go to a competitor?

H. Thomas Boyle: Great question. There are a number of factors. As Joe touched on, there are macro factors—overall activity levels, GDP growth, job growth—which we think are benefiting churn levels into the first quarter. We are also focused on customer experience—PS 4.0’s customer obsession—delivering a better product and service, which supports longer length of stay. Affordability relative to alternatives is also a factor.

Brendan James Lynch: Thanks. And on more challenged markets like Tampa, Atlanta, and Phoenix, do you anticipate dynamics continuing to improve, or is there new supply or other challenges that could still emerge?

H. Thomas Boyle: We continue to expect new supply to taper down, and that is impacting many of those markets. Tampa had storm-related comps that we are lapping. We have seen encouraging trends in Dallas, Atlanta, and Phoenix where new supply is being absorbed. Revenue growth is still negative year-over-year but improving sequentially. That speaks to modest improvement as we move through 2026 and forward.

Joe Fisher: One thing we are watching is third-party data on occupancy and rate. We seem to be leveling out and stabilizing, which is a good sign for the trajectory coming out of this period. As supply comes down and we execute our initiatives to capture more than our fair share, we are optimistic that we have reached a period of stabilization cyclically.

H. Thomas Boyle: Stepping back, the recovery in some of those markets has taken longer than we would have liked, but absorption is taking place, and strength in coastal markets continues to build. While timing has been slower than hoped a couple of years ago, we are investing in the platform, focused on deploying capital, improving operations, and taking advantage of the opportunity set.

Brendan James Lynch: Thank you both.

Operator: Our next question is from Juan Carlos Sanabria with BMO Capital Markets. Your line is now live.

Juan Carlos Sanabria: Good morning. On churn and the interplay with ECRIs, the implied contribution of ECRIs seems to have come down. Is there greater ability for local or corporate to soften ECRIs if the customer complains to keep them on board and reduce churn? How should we think about ECRIs and churn given the moderating macro?

H. Thomas Boyle: The encouraging thing is we have seen really steady customer behavior across the board—lower delinquency, stable payment patterns, and lower vacate activity. I would add price elasticity to that list; we have not seen a shift there. Replacement cost components of the ECRI modeling are improving as well. As for overall contribution on a year-over-year comp basis, a big component is Los Angeles—this year we cannot send rental rate increases at all, whereas last year we could send more modest increases. That is the primary component of the year-over-year comp change. Stepping back, price elasticity remains healthy, customers place value on our product, and rents remain affordable versus alternatives, which supports lower vacate activity.

Juan Carlos Sanabria: Bigger picture: lessons from prior periods when oil or energy prices spiked and any impact on storage and churn?

H. Thomas Boyle: In prior periods of macro stress—excluding COVID—we typically saw vacate activity tick higher. Encouragingly, we have seen the opposite, and that has continued through April. On oil and gas prices specifically, we have seen increases at several points over the last 10–20 years without a material impact on storage activity. That goes back to the needs-based nature of our product—customers come to storage because of life events, not discretionary choice. We are monitoring customer behavior closely, and it has been encouraging to date.

Juan Carlos Sanabria: Thank you.

Operator: Our next question comes from Caitlin Burrows with Goldman Sachs. Your line is now live.

Caitlin Burrows: Hi, everyone. A number of 1Q metrics came in better than expected. Is the reason for no change to guidance simply that it is too soon with busy season ahead, or are there known offsets like timing of acquisitions or debt that we should note?

Joe Fisher: It is the former. Hopefully you pick up our positive tone on the start to the year. We are very encouraged, but we are still early with a busy season ahead. We still have NSA to close and integrate. Our focus is on how we will finish the year, not how we started it. We will revert back in February with, hopefully, a positive update.

Caitlin Burrows: Got it. On supply, you mentioned ongoing competition in some Sunbelt markets. How long do you think that takes to dissipate, and what makes you confident those headwinds do not reemerge?

H. Thomas Boyle: Sunbelt markets have strong demand trajectories—population growth, job growth, income growth. We are encouraged by the longer-term setup in markets like Tampa and the West Coast of Florida, Atlanta, and Dallas-Fort Worth. New supply periodically impacts real estate cycles in those markets, and we are in that phase. Encouragingly, new supply is tapering and being absorbed. Sequential trends have been improving quarter-over-quarter in many of those markets. Development is more challenging nationwide—longer city timelines and processes, higher financing and construction costs, and, in many Sunbelt markets, lower current revenues. Economic barriers to entry are rising. We anticipate supply takes another leg lower this year and likely further into next year.

Joe Fisher: It is important to note that our ability to lean into development reflects our team quality, scale, and PSNext. Our 8% stabilized yields are not representative of the broader market. That value creation is unique to us, which is why we can continue to lean into development while others pull back.

Caitlin Burrows: Thanks for the details.

Operator: Our next question is from Michael Anderson Griffin with Evercore ISI. Your line is now live.

Michael Anderson Griffin: Thanks. Circling back on PSNext and how it relates to marketing spend and targeted marketing—can you give examples of how customer acquisition or marketing spend, leveraging data from Google or AI, has changed with PSNext relative to how Public Storage was doing it previously?

H. Thomas Boyle: There is a lot there to unpack. We welcomed our new Revenue and Marketing Officer, Ayush Basu, earlier this year, and he is shaping our revenue and marketing strategies. Working with our existing team, we leaned in through the first quarter on targeting initiatives—both via Google and website conversion—to target customers with attractive lifetime value. They are working closely with Natalia Johnson and her data science team to utilize our data more precisely. When a customer lands on our website, we estimate lifetime value and tailor pricing and promotion mix accordingly. On Google, we go find more customers like that. All of those are in the mix, and we are excited to see what these leaders drive from here.

Michael Anderson Griffin: Thanks. And a clarification: On the $185 million of deals that closed subsequent to quarter-end, were any related to the Welltower data science partnership, or were they already in the hopper?

H. Thomas Boyle: Those were already in the hopper. The Welltower-related opportunities are to come.

Michael Anderson Griffin: Great. Thanks so much.

Operator: Our next question comes from Spenser Bowes Glimcher with Green Street Advisors. Your line is now live.

Spenser Bowes Glimcher: Thank you. In LA, how long has it historically taken to get customers back to market rents after rent freezes, and could this catch-up take longer this time given a weaker demand landscape?

H. Thomas Boyle: The demand landscape in greater Los Angeles remains healthy. Orange County, San Diego, and other nearby counties continue to see strong demand, high occupancies, and good rental rate trends. We have a differentiated, attractive, and irreplaceable LA portfolio that we have owned for decades and continue to improve. As for returning to market rental rates, that is not within our control today. Historically, after the Hill and Woolsey fires and the COVID emergencies, it took roughly 18–24 months to get back to prior rent levels. Those emergencies lasted longer than where we sit today, so that provides a guidepost.

We will not rush, given our platform and brand breadth in LA, but we are confident in our ability to accelerate to market rents over 12–24 months once allowed.

Spenser Bowes Glimcher: Thank you. And on the transaction market, what are you seeing in terms of assets on the market, the bid-ask spread, and cap rates?

H. Thomas Boyle: We have been encouraged by a broadening seller set—activity from institutional sellers, mom-and-pop sellers, and everything in between. Stability in operations and interest rates has narrowed the bid-ask spread. On cap rates, stabilized product is trading in the 5s, getting into the 6s as we put them on our platform, reflecting PSNext’s ability to drive higher cash flow. About three-quarters of our year-to-date activity has been off-market, with targeted micro market focus. NSA, on the other end of the spectrum, is a large portfolio opportunity. We are interested across the spectrum and have tactics and team investments to address both.

Spenser Bowes Glimcher: Great. Thank you.

Operator: Our next question comes from Ravi Vijay Vaidya with Mizuho. Please proceed with your question.

Ravi Vijay Vaidya: Thank you for taking my question. You offered comments on how you expect revenue to trend throughout 2026, but how do you expect expenses to trend given the strong start?

Joe Fisher: Hey, Ravi. We had a lot of success in 1Q—better than expected—with property taxes, personnel, marketing, utilities, and R&M all down year-over-year. We had about a $3 million one-time benefit in property taxes from an appeal win we originally expected in 2Q, so there is no change to full-year guidance—just timing. Looking forward to our midpoint, we still expect constrained expense growth overall and relative to peers. It will tick higher as we track toward the midpoint we previously laid out, but we have many initiatives to keep expense growth constrained and below inflation.

Ravi Vijay Vaidya: Got it. One more: You had less promotional activity this quarter than a year ago. Is that something we should expect going forward, and how do you consider promotions when both move-in and move-out volumes are declining?

H. Thomas Boyle: Promotions are one tool; I would also highlight marketing and rental rates as tools to drive conversion and traffic into the customer acquisition funnel. Promotions have been down fairly consistently over the last year. Move-in rental rate trends have been improving, and marketing came down a bit given less churn and less inventory to re-rent. These are encouraging trends across all three levers. We will continue to use them dynamically at the store level to optimize revenue.

Ravi Vijay Vaidya: Thank you. Appreciate it.

Operator: Our next question is from Michael William Mueller with JPMorgan. Your line is now live.

Michael William Mueller: Hi. On the lending program, are you looking at it largely as a lending business to make money in, or does there need to be an angle to ultimately get to the real estate or management? And how big could it ultimately be?

Joe Fisher: Mike, of course we are looking to make a strong risk-adjusted return in the lending business. It is around a $150 million business today. We think it could grow into the $500 million to $1 billion range over time, but we are not striving to get there for its own sake—we will remain disciplined. There are ancillary benefits: it can be a potential feeder for future acquisitions, we secure third-party property management on these assets, and we provide tenant insurance. When you look at the platform’s profitability, you should take a holistic view of the loan yield plus these additional revenue and cash flow streams.

Michael William Mueller: Got it. Thank you.

Operator: Our next question is from Eric Thomas Luebchow with Wells Fargo. Your line is now live.

Eric Thomas Luebchow: Tom, you touched on move-ins being down year-over-year due to less inventory. Can you talk about top-of-funnel demand—web search, in-store traffic—and whether recent volatility in mortgage rates, fuel prices, and slower home sales is creating any caution from incoming customers?

H. Thomas Boyle: Some of the same macro themes influencing lower churn are also impacting move-ins. It varies by market. In stronger markets like Minneapolis, San Francisco, New York, and Boston, top-of-funnel trends are good. In markets still absorbing new supply—several in Florida, Dallas, and others—incoming traffic is a bit softer, as expected. Big picture, more modest incoming demand paired with lower churn and less inventory to rent is a favorable combination and gives us a bit more pricing power.

Eric Thomas Luebchow: And a follow-up on acquisitions: Given the size and complexity of NSA, does it impact your willingness to pursue larger, more complex portfolios, or should we expect more one-off private-market assets to trade this year?

H. Thomas Boyle: Bigger portfolios are tougher to predict and are dependent on sellers. Our team is built for one-off acquisitions and micro market targeting, and we have been investing in team size and data science to enhance that. Those capabilities are certainly applicable to portfolios as well. We do have a big closing coming in the third quarter. Around that immediate closing window, we will prioritize NSA integration to ensure it goes smoothly. Away from that, we are looking to continue to deploy capital at attractive risk-adjusted returns and grow per share earnings over time. The teams are built, the balance sheet is in a good spot, and we expect to be active through 2026.

Operator: We have reached the end of the question-and-answer session. I would now like to turn the call back to H. Thomas Boyle for closing comments.

H. Thomas Boyle: Thanks, everyone, for joining this morning and afternoon. We appreciate the questions and look forward to updating you on how the busy season progresses through the second quarter. Thanks very much, everybody.