Public Storage Reports Results for the Fourth Quarter and Year Ended December 31, 2018
GLENDALE, Calif.–(BUSINESS WIRE)–Public Storage (NYSE:PSA) announced today operating results for the
quarter and year ended December 31, 2018.
Operating Results for the Three Months Ended
December 31, 2018
For the three months ended December 31, 2018, net income allocable to
our common shareholders was $530.1 million or $3.04 per diluted common
share, compared to $334.1 million or $1.92 per diluted common share in
2017 representing an increase of $196.0 million or $1.12 per diluted
common share. The increase is due primarily to (i) $183.1 million in
aggregate gains due to Shurgard Self Storage SA’s (“Shurgard Europe’s”)
initial public offering and the sale of our facility in West London to
Shurgard Europe, (ii) a $11.1 million increase in self-storage net
operating income (described below) and (iii) a $11.0 million increase
due to the impact of foreign currency exchange gains and losses
associated with our euro denominated debt, offset partially by (iv) a
$8.1 million increase in general and administrative expense due to the
acceleration of share-based compensation expense accruals for our former
CEO and CFO in 2018 as a result of their retirement on December 31, 2018.
The $11.1 million increase in self-storage net operating income is a
result of a $1.9 million increase in our Same Store Facilities (as
defined below) and a $9.2 million increase in our Non Same Store
Facilities (as defined below). Revenues for the Same Store Facilities
increased 1.2% or $6.7 million in the three months ended December 31,
2018 as compared to 2017, due primarily to higher realized annual rent
per occupied square foot. Cost of operations for the Same Store
Facilities increased by 4.1% or $4.8 million in the three months ended
December 31, 2018 as compared to 2017, due primarily to increased
property taxes and higher marketing expenses. The increase in net
operating income of $9.2 million for the Non Same Store Facilities is
due primarily to the impact of 164 self-storage facilities acquired and
developed since January 2016.
Operating Results for the Year Ended December
31, 2018
In 2018, net income allocable to our common shareholders was $1,488.9
million or $8.54 per diluted common share, compared to $1,171.6 million
or $6.73 per diluted common share in 2017 representing an increase of
$317.3 million or $1.81 per diluted common share. The increase is due
primarily to (i) $183.1 million in aggregate gains due to Shurgard
Europe’s initial public offering and the sale of our facility in West
London to Shurgard Europe, (ii) a $47.1 million increase in self-storage
net operating income (described below), (iii) our $37.7 million equity
share of gains recorded by PS Business Parks in 2018, (iv) a $68.2
million increase due to the impact of foreign currency exchange gains
and losses associated with our euro denominated debt, (v) a $29.3
million allocation to preferred shareholders associated with preferred
share redemptions in 2017 and (vi) a $7.8 million casualty loss and $5.2
million in incremental tenant reinsurance losses related to Hurricanes
Harvey and Irma in 2017. These impacts were offset partially by a $36.1
million increase in general and administrative expense due to the
acceleration of share-based compensation expense accruals for our former
CEO and CFO in 2018 as a result of their retirement on December 31, 2018
and the reversal of share-based compensation accruals forfeited by
retiring senior executive officers in 2017.
The $47.1 million increase in self-storage net operating income is a
result of a $15.6 million increase in our Same Store Facilities and
$31.5 million increase in our Non Same Store Facilities. Revenues for
the Same Store Facilities increased 1.5% or $33.3 million in 2018 as
compared to 2017, due primarily to higher realized annual rent per
occupied square foot. Cost of operations for the Same Store Facilities
increased by 3.2% or $17.7 million in 2018 as compared to 2017, due
primarily to increased property taxes. The increase in net operating
income of $31.5 million for the Non Same Store Facilities is due
primarily to the impact of 164 self-storage facilities acquired and
developed since January 2016.
Funds from Operations
For the three months ended December 31, 2018, funds from operations
(“FFO”) was $2.77 per diluted common share, as compared to $2.70 in
2017, representing an increase of 2.6%. FFO is a non-GAAP measure
defined by the National Association of Real Estate Investment Trusts and
generally represents net income before depreciation and amortization
expense, gains and losses and impairment charges with respect to real
estate assets. A reconciliation of GAAP diluted net income per share to
FFO per share, and additional descriptive information regarding this
non-GAAP measure, is attached.
For the year ended December 31, 2018, FFO was $10.45 per diluted common
share, as compared to $9.70 in 2017, representing an increase of 7.7%.
We also present “Core FFO per share,” a non-GAAP measure that represents
FFO per share excluding the impact of (i) foreign currency exchange
gains and losses, (ii) EITF D-42 charges related to the redemption of
preferred securities, (iii) accelerations of accruals due to the
retirement of our former CEO and CFO and reversals of accruals with
respect to share-based awards forfeited by retiring senior executive
officers and (iv) certain other non-cash and/or nonrecurring income or
expense items. We review Core FFO per share to evaluate our ongoing
operating performance, and we believe it is used by investors and REIT
analysts in a similar manner. However, Core FFO per share is not a
substitute for net income per share. Because other REITs may not compute
Core FFO per share in the same manner as we do, may not use the same
terminology or may not present such a measure, Core FFO per share may
not be comparable among REITs.
The following table reconciles from FFO per share to Core FFO per share
(unaudited):
|
Three Months Ended December 31, |
Year Ended December 31, |
||||||||||||||||||||||
|
2018 |
2017 |
Percentage |
2018 |
2017 |
Percentage |
||||||||||||||||||
| FFO per share |
$ |
2.77 |
$ |
2.70 |
2.6 | % |
$ |
10.45 |
$ |
9.70 |
7.7 | % | |||||||||||
| Eliminate the per share impact of | |||||||||||||||||||||||
| items excluded from Core FFO, including | |||||||||||||||||||||||
| our equity share from investments: | |||||||||||||||||||||||
| Foreign currency exchange (gain) loss | (0.03 | ) | 0.03 | (0.10 | ) | 0.29 | |||||||||||||||||
| Application of EITF D-42 | – | 0.01 | – | 0.19 | |||||||||||||||||||
| Casualty losses and tenant claims due to | |||||||||||||||||||||||
| hurricanes | – | – | – | 0.07 | |||||||||||||||||||
|
Shurgard Europe – IPO costs and casualty |
|||||||||||||||||||||||
| loss | 0.02 | – | 0.03 | – | |||||||||||||||||||
| Acceleration (reversal) of share-based | |||||||||||||||||||||||
| compensation expense due to | |||||||||||||||||||||||
| executive officer retirement | 0.05 | – | 0.18 | (0.03 | ) | ||||||||||||||||||
| Other items | – | 0.01 | – | 0.01 | |||||||||||||||||||
| Core FFO per share |
$ |
2.81 |
$ |
2.75 |
2.2 | % |
$ |
10.56 |
$ |
10.23 |
3.2 | % | |||||||||||
Property Operations – Same Store Facilities
The Same Store Facilities represent those facilities that have been
owned and operated on a stabilized level of occupancy, revenues and cost
of operations since January 1, 2016. We review the operations of our
Same Store Facilities, which excludes facilities whose operating trends
are significantly affected by factors such as casualty events, as well
as recently developed or acquired facilities, to more effectively
evaluate the ongoing performance of our self-storage portfolio in 2016,
2017 and 2018. We believe the Same Store information is used by
investors and REIT analysts in a similar manner. The following table
summarizes the historical operating results of these 2,046 facilities
(131.2 million net rentable square feet) that represent approximately
81% of the aggregate net rentable square feet of our U.S. consolidated
self-storage portfolio at December 31, 2018.
|
Selected Operating Data for the Same |
||||||||||||||||||||||||
|
Store Facilities (2,046 facilities) |
||||||||||||||||||||||||
|
(unaudited): |
||||||||||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
|
Percentage |
Percentage | |||||||||||||||||||||||
| 2018 | 2017 | Change | 2018 | 2017 | Change | |||||||||||||||||||
| (Dollar amounts in thousands, except for per square foot amounts) | ||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||
| Rental income | $ | 537,032 | $ | 530,276 | 1.3 | % | $ | 2,144,330 | $ | 2,111,164 | 1.6 | % | ||||||||||||
| Late charges and administrative fees | 24,868 | 24,888 | (0.1 | )% | 98,425 | 98,263 | 0.2 | % | ||||||||||||||||
| Total revenues (a) | 561,900 | 555,164 | 1.2 | % | 2,242,755 | 2,209,427 | 1.5 | % | ||||||||||||||||
| Cost of operations: | ||||||||||||||||||||||||
| Property taxes | 34,136 | 32,320 | 5.6 | % | 210,637 | 200,005 | 5.3 | % | ||||||||||||||||
| On-site property manager payroll | 24,647 | 24,936 | (1.2 | )% | 109,713 | 108,477 | 1.1 | % | ||||||||||||||||
| Supervisory payroll | 7,473 | 8,547 | (12.6 | )% | 35,275 | 38,175 | (7.6 | )% | ||||||||||||||||
| Repairs and maintenance | 11,150 | 11,203 | (0.5 | )% | 42,730 | 43,465 | (1.7 | )% | ||||||||||||||||
| Snow removal | 683 | 766 | (10.8 | )% | 3,470 | 2,982 | 16.4 | % | ||||||||||||||||
| Utilities | 9,837 | 9,239 | 6.5 | % | 41,075 | 39,477 | 4.0 | % | ||||||||||||||||
| Marketing | 8,744 | 6,794 | 28.7 | % | 30,771 | 28,679 | 7.3 | % | ||||||||||||||||
| Other direct property costs | 14,746 | 14,305 | 3.1 | % | 59,096 | 56,975 | 3.7 | % | ||||||||||||||||
| Allocated overhead | 11,678 | 10,151 | 15.0 | % | 46,753 | 43,539 | 7.4 | % | ||||||||||||||||
| Total cost of operations (a) | 123,094 | 118,261 | 4.1 | % | 579,520 | 561,774 | 3.2 | % | ||||||||||||||||
| Net operating income (b) | $ | 438,806 | $ | 436,903 | 0.4 | % | $ | 1,663,235 | $ | 1,647,653 | 0.9 | % | ||||||||||||
| Gross margin | 78.1 | % | 78.7 | % | (0.8 | )% | 74.2 | % | 74.6 | % | (0.5 | )% | ||||||||||||
| Weighted average for the period: | ||||||||||||||||||||||||
| Square foot occupancy | 92.6 | % | 93.1 | % | (0.5 | )% | 93.2 | % | 93.8 | % | (0.6 | )% | ||||||||||||
| Realized annual rental income per (c): | ||||||||||||||||||||||||
| Occupied square foot | $ | 17.68 | $ | 17.37 | 1.8 | % | $ | 17.54 | $ | 17.15 | 2.3 | % | ||||||||||||
| Available square foot (“REVPAF”) | $ | 16.38 | $ | 16.17 | 1.3 | % | $ | 16.35 | $ | 16.09 | 1.6 | % | ||||||||||||
| At December 31: | ||||||||||||||||||||||||
| Square foot occupancy | 91.4 | % | 91.2 | % | 0.2 | % | ||||||||||||||||||
| Annual contract rent per occupied | ||||||||||||||||||||||||
| square foot (d) | $ | 18.17 | $ | 17.94 | 1.3 | % | ||||||||||||||||||
| (a) |
Revenues and cost of operations do not include ancillary revenues and expenses generated at the facilities with respect to tenant reinsurance and retail sales. |
||
| (b) | See attached reconciliation of self-storage NOI to net income. | ||
| (c) |
Realized annual rent per occupied square foot is computed by dividing annualized rental income, before late charges and administrative fees, by the weighted average occupied square feet for the period. Realized annual rent per available square foot (“REVPAF”) is computed by dividing annualized rental income, before late charges and administrative fees, by the total available rentable square feet for the period. These measures exclude late charges and administrative fees in order to provide a better measure of our ongoing level of revenue. Late charges are dependent upon the level of delinquency, and administrative fees are dependent upon the level of move-ins. In addition, the rates charged for late charges and administrative fees can vary independently from rental rates. These measures take into consideration promotional discounts, which reduce rental income. |
||
| (d) |
Contract rent represents the applicable contractual monthly rent charged to our tenants, excluding the impact of promotional discounts, late charges and administrative fees. |
||
The following table summarizes selected quarterly financial data with
respect to the Same Store Facilities (unaudited):
| For the Quarter Ended | ||||||||||||||||||||||
| March 31 | June 30 | September 30 | December 31 | Entire Year | ||||||||||||||||||
| (Amounts in thousands, except for per square foot amounts) | ||||||||||||||||||||||
| Total revenues: | ||||||||||||||||||||||
|
2018 |
$ | 548,116 | $ | 558,216 | $ | 574,523 | $ | 561,900 | $ | 2,242,755 | ||||||||||||
|
2017 |
$ | 536,618 | $ | 549,676 | $ | 567,969 | $ | 555,164 | $ | 2,209,427 | ||||||||||||
| Total cost of operations: | ||||||||||||||||||||||
|
2018 |
$ | 153,532 | $ | 150,688 | $ | 152,206 | $ | 123,094 | $ | 579,520 | ||||||||||||
|
2017 |
$ | 148,577 | $ | 146,857 | $ | 148,079 | $ | 118,261 | $ | 561,774 | ||||||||||||
| Property taxes: | ||||||||||||||||||||||
|
2018 |
$ | 58,359 | $ | 59,138 | $ | 59,004 | $ | 34,136 | $ | 210,637 | ||||||||||||
|
2017 |
$ | 55,831 | $ | 56,032 | $ | 55,822 | $ | 32,320 | $ | 200,005 | ||||||||||||
| Repairs and maintenance, including | ||||||||||||||||||||||
|
snow removal expenses: |
||||||||||||||||||||||
|
2018 |
$ | 11,523 | $ | 11,593 | $ | 11,251 | $ | 11,833 | $ | 46,200 | ||||||||||||
|
2017 |
$ | 11,684 | $ | 11,387 | $ | 11,407 | $ | 11,969 | $ | 46,447 | ||||||||||||
| Marketing: | ||||||||||||||||||||||
|
2018 |
$ | 6,516 | $ | 7,697 | $ | 7,814 | $ | 8,744 | $ | 30,771 | ||||||||||||
|
2017 |
$ | 6,792 | $ | 8,127 | $ | 6,966 | $ | 6,794 | $ | 28,679 | ||||||||||||
| REVPAF: | ||||||||||||||||||||||
|
2018 |
$ | 15.97 | $ | 16.31 | $ | 16.75 | $ | 16.38 | $ | 16.35 | ||||||||||||
|
2017 |
$ | 15.63 | $ | 16.03 | $ | 16.54 | $ | 16.17 | $ | 16.09 | ||||||||||||
| Weighted average realized annual | ||||||||||||||||||||||
| rent per occupied square foot: | ||||||||||||||||||||||
|
2018 |
$ | 17.30 | $ | 17.35 | $ | 17.83 | $ | 17.68 | $ | 17.54 | ||||||||||||
|
2017 |
$ | 16.79 | $ | 16.95 | $ | 17.49 | $ | 17.37 | $ | 17.15 | ||||||||||||
| Weighted average occupancy levels | ||||||||||||||||||||||
| for the period: | ||||||||||||||||||||||
|
2018 |
92.3 | % | 94.0 | % | 94.0 | % | 92.6 | % | 93.2 | % | ||||||||||||
|
2017 |
93.1 | % | 94.6 | % | 94.6 | % | 93.1 | % | 93.8 | % | ||||||||||||
The following table sets forth selected market trends in our Same Store
Facilities:
| Same Store Facilities Operating Trends by Market (Unaudited) | ||||||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||
| 2018 | 2017 | Change | 2018 | 2017 | Change | |||||||||||||||
| (Amounts in thousands, except for weighted average data) | ||||||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Los Angeles | $ | 85,617 | $ | 82,881 | 3.3 | % | $ | 339,037 | $ | 327,326 | 3.6 | % | ||||||||
| San Francisco | 48,214 | 47,479 | 1.5 | % | 192,620 | 188,139 | 2.4 | % | ||||||||||||
| New York | 35,416 | 34,517 | 2.6 | % | 140,463 | 136,654 | 2.8 | % | ||||||||||||
| Seattle-Tacoma | 26,139 | 25,964 | 0.7 | % | 104,659 | 102,810 | 1.8 | % | ||||||||||||
| Washington DC | 26,566 | 26,173 | 1.5 | % | 105,339 | 105,228 | 0.1 | % | ||||||||||||
| Miami | 24,062 | 24,130 | (0.3 | )% | 96,900 | 95,726 | 1.2 | % | ||||||||||||
| Chicago | 29,230 | 29,766 | (1.8 | )% | 117,715 | 120,500 | (2.3 | )% | ||||||||||||
| Atlanta | 21,250 | 20,877 | 1.8 | % | 84,275 | 82,534 | 2.1 | % | ||||||||||||
| Dallas-Ft. Worth | 15,711 | 16,130 | (2.6 | )% | 63,393 | 65,070 | (2.6 | )% | ||||||||||||
| Houston | 16,006 | 16,409 | (2.5 | )% | 65,155 | 64,639 | 0.8 | % | ||||||||||||
| Philadelphia | 14,599 | 13,994 | 4.3 | % | 57,469 | 55,759 | 3.1 | % | ||||||||||||
| Orlando-Daytona | 13,643 | 13,461 | 1.4 | % | 54,635 | 52,700 | 3.7 | % | ||||||||||||
| West Palm Beach | 11,674 | 11,628 | 0.4 | % | 46,614 | 45,650 | 2.1 | % | ||||||||||||
| Tampa | 10,951 | 10,991 | (0.4 | )% | 44,004 | 43,484 | 1.2 | % | ||||||||||||
| Portland | 9,815 | 9,917 | (1.0 | )% | 39,603 | 39,997 | (1.0 | )% | ||||||||||||
| All other markets | 173,007 | 170,847 | 1.3 | % | 690,874 | 683,211 | 1.1 | % | ||||||||||||
| Total revenues | $ | 561,900 | $ | 555,164 | 1.2 | % | $ | 2,242,755 | $ | 2,209,427 | 1.5 | % | ||||||||
| Net operating income: | ||||||||||||||||||||
| Los Angeles | $ | 72,351 | $ | 70,364 | 2.8 | % | $ | 280,907 | $ | 272,106 | 3.2 | % | ||||||||
| San Francisco | 39,909 | 39,742 | 0.4 | % | 156,691 | 153,787 | 1.9 | % | ||||||||||||
| New York | 28,664 | 27,814 | 3.1 | % | 101,662 | 99,143 | 2.5 | % | ||||||||||||
| Seattle-Tacoma | 20,988 | 21,110 | (0.6 | )% | 82,007 | 81,271 | 0.9 | % | ||||||||||||
| Washington DC | 20,806 | 20,370 | 2.1 | % | 78,780 | 79,292 | (0.6 | )% | ||||||||||||
| Miami | 21,976 | 22,003 | (0.1 | )% | 72,881 | 72,307 | 0.8 | % | ||||||||||||
| Chicago | 18,791 | 20,164 | (6.8 | )% | 65,155 | 70,445 | (7.5 | )% | ||||||||||||
| Atlanta | 16,606 | 16,222 | 2.4 | % | 62,500 | 61,110 | 2.3 | % | ||||||||||||
| Dallas-Ft. Worth | 12,906 | 13,754 | (6.2 | )% | 44,642 | 46,572 | (4.1 | )% | ||||||||||||
| Houston | 10,650 | 10,453 | 1.9 | % | 43,039 | 42,546 | 1.2 | % | ||||||||||||
| Philadelphia | 10,553 | 9,869 | 6.9 | % | 40,456 | 39,485 | 2.5 | % | ||||||||||||
| Orlando-Daytona | 10,859 | 10,827 | 0.3 | % | 40,240 | 38,951 | 3.3 | % | ||||||||||||
| West Palm Beach | 8,986 | 8,873 | 1.3 | % | 34,806 | 33,868 | 2.8 | % | ||||||||||||
| Tampa | 8,552 | 8,744 | (2.2 | )% | 31,796 | 31,591 | 0.6 | % | ||||||||||||
| Portland | 7,864 | 8,021 | (2.0 | )% | 30,767 | 31,304 | (1.7 | )% | ||||||||||||
| All other markets | 128,345 | 128,573 | (0.2 | )% | 496,906 | 493,875 | 0.6 | % | ||||||||||||
| Total net operating income | $ | 438,806 | $ | 436,903 | 0.4 | % | $ | 1,663,235 | $ | 1,647,653 | 0.9 | % | ||||||||
|
Same Store Facilities Operating Trends by Market |
||||||||||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
| 2018 | 2017 | Change | 2018 | 2017 | Change | |||||||||||||||||||
| Weighted average square foot | ||||||||||||||||||||||||
| occupancy: | ||||||||||||||||||||||||
| Los Angeles | 94.8 | % | 95.2 | % | (0.4 | )% | 95.2 | % | 95.7 | % | (0.5 | )% | ||||||||||||
| San Francisco | 93.6 | % | 94.5 | % | (1.0 | )% | 94.5 | % | 95.2 | % | (0.7 | )% | ||||||||||||
| New York | 93.8 | % | 94.1 | % | (0.3 | )% | 94.3 | % | 94.3 | % | 0.0 | % | ||||||||||||
| Seattle-Tacoma | 92.0 | % | 93.2 | % | (1.3 | )% | 93.2 | % | 94.5 | % | (1.4 | )% | ||||||||||||
| Washington DC | 91.9 | % | 91.3 | % | 0.7 | % | 92.4 | % | 92.7 | % | (0.3 | )% | ||||||||||||
| Miami | 92.1 | % | 93.5 | % | (1.5 | )% | 92.7 | % | 93.5 | % | (0.9 | )% | ||||||||||||
| Chicago | 90.1 | % | 89.8 | % | 0.3 | % | 90.3 | % | 91.2 | % | (1.0 | )% | ||||||||||||
| Atlanta | 93.1 | % | 93.0 | % | 0.1 | % | 93.2 | % | 93.5 | % | (0.3 | )% | ||||||||||||
| Dallas-Ft. Worth | 91.5 | % | 92.0 | % | (0.5 | )% | 91.7 | % | 93.3 | % | (1.7 | )% | ||||||||||||
| Houston | 89.7 | % | 94.2 | % | (4.8 | )% | 90.8 | % | 91.8 | % | (1.1 | )% | ||||||||||||
| Philadelphia | 94.6 | % | 93.6 | % | 1.1 | % | 94.8 | % | 94.6 | % | 0.2 | % | ||||||||||||
| Orlando-Daytona | 93.0 | % | 94.5 | % | (1.6 | )% | 94.4 | % | 95.0 | % | (0.6 | )% | ||||||||||||
| West Palm Beach | 93.7 | % | 95.2 | % | (1.6 | )% | 94.1 | % | 94.9 | % | (0.8 | )% | ||||||||||||
| Tampa | 91.8 | % | 93.8 | % | (2.1 | )% | 93.0 | % | 94.3 | % | (1.4 | )% | ||||||||||||
| Portland | 92.9 | % | 94.1 | % | (1.3 | )% | 94.1 | % | 95.3 | % | (1.3 | )% | ||||||||||||
| All other markets | 92.5 | % | 92.5 | % | 0.0 | % | 93.1 | % | 93.6 | % | (0.5 | )% | ||||||||||||
| Total weighted average | ||||||||||||||||||||||||
| square foot occupancy | 92.6 | % | 93.1 | % | (0.5 | )% | 93.2 | % | 93.8 | % | (0.6 | )% | ||||||||||||
| Realized annual rent per | ||||||||||||||||||||||||
| occupied square foot: | ||||||||||||||||||||||||
| Los Angeles | $ | 26.08 | $ | 25.12 | 3.8 | % | $ | 25.72 | $ | 24.67 | 4.3 | % | ||||||||||||
| San Francisco | 26.43 | 25.71 | 2.8 | % | 26.15 | 25.30 | 3.4 | % | ||||||||||||||||
| New York | 25.49 | 24.80 | 2.8 | % | 25.17 | 24.50 | 2.7 | % | ||||||||||||||||
| Seattle-Tacoma | 20.28 | 19.87 | 2.1 | % | 20.03 | 19.39 | 3.3 | % | ||||||||||||||||
| Washington DC | 21.65 | 21.44 | 1.0 | % | 21.41 | 21.16 | 1.2 | % | ||||||||||||||||
| Miami | 19.73 | 19.47 | 1.3 | % | 19.77 | 19.36 | 2.1 | % | ||||||||||||||||
| Chicago | 15.24 | 15.61 | (2.4 | )% | 15.33 | 15.56 | (1.5 | )% | ||||||||||||||||
| Atlanta | 13.32 | 13.13 | 1.4 | % | 13.19 | 12.89 | 2.3 | % | ||||||||||||||||
| Dallas-Ft. Worth | 13.23 | 13.53 | (2.2 | )% | 13.34 | 13.46 | (0.9 | )% | ||||||||||||||||
| Houston | 14.23 | 13.85 | 2.7 | % | 14.32 | 14.06 | 1.8 | % | ||||||||||||||||
| Philadelphia | 16.39 | 15.86 | 3.3 | % | 16.10 | 15.66 | 2.8 | % | ||||||||||||||||
| Orlando-Daytona | 14.06 | 13.64 | 3.1 | % | 13.88 | 13.31 | 4.3 | % | ||||||||||||||||
| West Palm Beach | 18.71 | 18.31 | 2.2 | % | 18.59 | 18.08 | 2.8 | % | ||||||||||||||||
| Tampa | 14.36 | 14.09 | 1.9 | % | 14.25 | 13.90 | 2.5 | % | ||||||||||||||||
| Portland | 18.76 | 18.72 | 0.2 | % | 18.70 | 18.61 | 0.5 | % | ||||||||||||||||
| All other markets | 14.37 | 14.20 | 1.2 | % | 14.27 | 14.03 | 1.7 | % | ||||||||||||||||
| Total realized rent per | ||||||||||||||||||||||||
| occupied square foot | $ | 17.68 | $ | 17.37 | 1.8 | % | $ | 17.54 | $ | 17.15 | 2.3 | % | ||||||||||||
|
Same Store Facilities Operating Trends by Market |
||||||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||
| 2018 | 2017 | Change | 2018 | 2017 | Change | |||||||||||||||
| REVPAF: | ||||||||||||||||||||
| Los Angeles | $ | 24.72 | $ | 23.91 | 3.4 | % | $ | 24.48 | $ | 23.60 | 3.7 | % | ||||||||
| San Francisco | 24.75 | 24.30 | 1.9 | % | 24.71 | 24.10 | 2.5 | % | ||||||||||||
| New York | 23.91 | 23.33 | 2.5 | % | 23.74 | 23.10 | 2.8 | % | ||||||||||||
| Seattle-Tacoma | 18.66 | 18.53 | 0.7 | % | 18.67 | 18.31 | 2.0 | % | ||||||||||||
| Washington DC | 19.89 | 19.57 | 1.6 | % | 19.78 | 19.62 | 0.8 | % | ||||||||||||
| Miami | 18.18 | 18.20 | (0.1 | )% | 18.32 | 18.10 | 1.2 | % | ||||||||||||
| Chicago | 13.73 | 14.02 | (2.1 | )% | 13.84 | 14.19 | (2.5 | )% | ||||||||||||
| Atlanta | 12.40 | 12.21 | 1.6 | % | 12.30 | 12.06 | 2.0 | % | ||||||||||||
| Dallas-Ft. Worth | 12.10 | 12.45 | (2.8 | )% | 12.23 | 12.57 | (2.7 | )% | ||||||||||||
| Houston | 12.76 | 13.04 | (2.1 | )% | 13.00 | 12.91 | 0.7 | % | ||||||||||||
| Philadelphia | 15.51 | 14.85 | 4.4 | % | 15.26 | 14.81 | 3.0 | % | ||||||||||||
| Orlando-Daytona | 13.08 | 12.89 | 1.5 | % | 13.10 | 12.65 | 3.6 | % | ||||||||||||
| West Palm Beach | 17.52 | 17.43 | 0.5 | % | 17.50 | 17.16 | 2.0 | % | ||||||||||||
| Tampa | 13.19 | 13.22 | (0.2 | )% | 13.26 | 13.11 | 1.1 | % | ||||||||||||
| Portland | 17.43 | 17.61 | (1.0 | )% | 17.59 | 17.74 | (0.8 | )% | ||||||||||||
| All other markets | 13.30 | 13.13 | 1.3 | % | 13.28 | 13.13 | 1.1 | % | ||||||||||||
| Total REVPAF | $ | 16.38 | $ | 16.17 | 1.3 | % | $ | 16.35 | $ | 16.09 | 1.6 | % | ||||||||
Property Operations – Non Same Store Facilities
The Non Same Store Facilities at December 31, 2018 represent 383
facilities that were not stabilized with respect to occupancies or
rental rates since January 1, 2016 or that we did not own as of January
1, 2016. The following table summarizes operating data with respect to
the Non Same Store Facilities (unaudited). Additional data and metrics
with respect to these facilities is included in the MD&A in our December
31, 2018 Form 10-K.
| NON SAME STORE | Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||
| FACILITIES | 2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||||||
| (Dollar amounts in thousands, except for per square foot amounts) | ||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||
| 2018 acquisitions | $ | 2,879 | $ | – | $ | 2,879 | $ | 5,167 | $ | – | $ | 5,167 | ||||||||||
| 2017 acquisitions | 7,319 | 2,704 | 4,615 | 28,704 | 5,577 | 23,127 | ||||||||||||||||
| 2016 acquisitions | 9,945 | 9,427 | 518 | 39,166 | 36,336 | 2,830 | ||||||||||||||||
| 2016 – 2018 new developments | 11,460 | 6,310 | 5,150 | 37,625 | 17,391 | 20,234 | ||||||||||||||||
| 2013 – 2015 new developments | 6,842 | 6,470 | 372 | 26,725 | 24,910 | 1,815 | ||||||||||||||||
| Other facilities | 53,903 | 54,143 | (240 | ) | 217,465 | 218,792 | (1,327 | ) | ||||||||||||||
| Total revenues | 92,348 | 79,054 | 13,294 | 354,852 | 303,006 | 51,846 | ||||||||||||||||
| Cost of operations before | ||||||||||||||||||||||
|
depreciation and amortization |
||||||||||||||||||||||
| 2018 acquisitions | 1,276 | – | 1,276 | 2,141 | – | 2,141 | ||||||||||||||||
| 2017 acquisitions | 2,225 | 993 | 1,232 | 9,669 | 2,006 | 7,663 | ||||||||||||||||
| 2016 acquisitions | 2,886 | 3,345 | (459 | ) | 13,523 | 13,693 | (170 | ) | ||||||||||||||
| 2016 – 2018 new developments | 6,737 | 3,028 | 3,709 | 22,120 | 11,433 | 10,687 | ||||||||||||||||
| 2013 – 2015 new developments | 1,714 | 2,038 | (324 | ) | 8,031 | 8,093 | (62 | ) | ||||||||||||||
| Other facilities | 12,099 | 13,480 | (1,381 | ) | 60,727 | 60,634 | 93 | |||||||||||||||
| Total cost of operations | 26,937 | 22,884 | 4,053 | 116,211 | 95,859 | 20,352 | ||||||||||||||||
| Net operating income: | ||||||||||||||||||||||
| 2018 acquisitions | 1,603 | – | 1,603 | 3,026 | – | 3,026 | ||||||||||||||||
| 2017 acquisitions | 5,094 | 1,711 | 3,383 | 19,035 | 3,571 | 15,464 | ||||||||||||||||
| 2016 acquisitions | 7,059 | 6,082 | 977 | 25,643 | 22,643 | 3,000 | ||||||||||||||||
| 2016 – 2018 new developments | 4,723 | 3,282 | 1,441 | 15,505 | 5,958 | 9,547 | ||||||||||||||||
| 2013 – 2015 new developments | 5,128 | 4,432 | 696 | 18,694 | 16,817 | 1,877 | ||||||||||||||||
| Other facilities | 41,804 | 40,663 | 1,141 | 156,738 | 158,158 | (1,420 | ) | |||||||||||||||
| Net operating income (a) | $ | 65,411 | $ | 56,170 | $ | 9,241 | $ | 238,641 | $ | 207,147 | $ | 31,494 | ||||||||||
| (a) |
See attached reconciliation of self-storage net operating income (“NOI”) to net income. |
Investing and Capital Activities
During the three months ended December 31, 2018, we acquired nine
self-storage facilities (two each in Georgia and Nebraska and one each
in Colorado, Indiana, Ohio, Oklahoma and Washington) with 0.6 million
net rentable square feet for $73.2 million. During 2018, we acquired 25
self-storage facilities (six in Minnesota, three in Nebraska, two each
in Georgia, Indiana, Ohio, South Carolina, Tennessee and Texas, and one
each in Colorado, Kentucky, Oklahoma and Washington) with 1.6 million
net rentable square feet for $181.0 million. Subsequent to December 31,
2018, we acquired or were under contract to acquire 14 self-storage
facilities (nine in Virginia and one each in Colorado, Florida, Georgia,
Kentucky and Michigan) with 0.9 million net rentable square feet for
$102.4 million.
During the three months ended December 31, 2018, we opened two newly
developed facilities and various expansion projects (0.6 million net
rentable square feet – 0.2 million in Texas, 0.1 million each in Florida
and Virginia and 0.2 million in other states) costing $70 million.
During 2018, we completed 18 newly developed facilities and various
expansion projects (3.0 million net rentable square feet – 1.2 million
in Texas, 0.6 million in Colorado and 1.2 million in other states)
costing an aggregate of $348 million. At December 31, 2018, we had
various facilities in development (1.7 million net rentable square feet)
estimated to cost $253 million and various expansion projects (3.5
million net rentable square feet) estimated to cost $354 million. Our
aggregate 5.2 million net rentable square foot pipeline of development
and expansion facilities includes 1.4 million in Texas, 1.0 million in
Florida, 0.8 million in Minnesota, 0.4 million in Colorado, 0.3 million
each in California and North Carolina and 1.0 million in other states.
The remaining $322 million of development costs for these projects is
expected to be incurred primarily in the next 18 months.
On October 15, 2018, Shurgard Europe completed an initial global
offering (the “Offering”), and its shares commenced trading on Euronext
Brussels under the “SHUR” symbol. In the Offering, Shurgard Europe
issued 25.0 million of its common shares to third parties at a price of
€23 per share. Our equity interest, comprised of a direct and indirect
pro-rata ownership interest in 31.3 million shares, decreased from 49%
to 35.2% as a result of the Offering. While we did not sell any shares
in the Offering, and we have no current plans to do so, we recorded a
gain on disposition of $151.6 million in the three months ending
December 31, 2018, as if we had sold a proportionate share of our
investment in Shurgard Europe. Shurgard Europe’s publicly reported
information can be obtained on its website, https://corporate.shurgard.eu
and on the website of the Luxembourg Stock Exchange, http://www.bourse.lu.
On October 18, 2018, we sold our property in West London to Shurgard
Europe for $42.1 million in cash and recorded a gain on disposition of
$31.5 million in the three months ended December 31, 2018.
On February 22, 2019, we called for redemption, and on March 28, 2019,
we will redeem, our 6.375% Series Y Preferred Shares for $285 million.
Distributions Declared
On February 19, 2019, our Board of Trustees declared a regular common
quarterly dividend of $2.00 per common share. The Board also declared
dividends with respect to our various series of preferred shares. All
the dividends are payable on March 28, 2019 to shareholders of record as
of March 13, 2019.
Fourth Quarter Conference Call
A conference call is scheduled for February 27, 2019 at 10:00 a.m. (PST)
to discuss the fourth quarter earnings results. The domestic dial-in
number is (866) 406-5408, and the international dial-in number is (973)
582-2770 (conference ID number for either domestic or international is
3294554). A simultaneous audio webcast may be accessed by using the link
at www.publicstorage.com
under “Company Info, Investor Relations, News and Events, Events
Calendar.” A replay of the conference call may be accessed through March
13, 2019 by calling (800) 585-8367 (domestic), (404) 537-3406
(international) or by using the link at www.publicstorage.com
under “Company Info, Investor Relations, News and Events, Events
Calendar.” All forms of replay utilize conference ID number 3294554.
About Public Storage
Public Storage, a member of the S&P 500 and FT Global 500, is a REIT
that primarily acquires, develops, owns and operates self-storage
facilities. The Company’s headquarters are located in Glendale,
California.
Contacts
Ryan Burke
(818) 244-8080, Ext. 1141