Public Storage buys NSA and Canada, lifts guidance as rents turn
Canada acquisition adds growth markets Public Storage agreed to buy Public Storage Canada for about $1.2 billion, adding 68 properties in Toronto, Vancouver, Montreal, Calgary and Ottawa. Management expects a high-5% income yield and double-digit returns, giving PSA new places to grow as U.S. demand stays soft.
New deal expands PSA's portfolio and is a core reason for the period's move.
NSA deal approved and closed National Storage Affiliates shareholders voted almost unanimously to approve Public Storage's takeover, and the deal closed around July 22. PSA absorbed roughly 1,100 stores, making it much bigger and giving it more scale to spread costs and negotiate.
The completed acquisition is a major new event reshaping PSA's size and earnings.
Debt raised to fund deals PSA priced $900 million of senior notes at about a 4.855% average rate to help pay for the NSA purchase. That adds interest costs and leverage, a real drag, but the money funds growth and the notes must be bought back if the deal falls through.
New borrowing is the financing side of the acquisitions and affects PSA's cost of capital.
Guidance raised, rents finally rising After closing NSA, PSA lifted 2026 core FFO guidance to $16.75-$17.05 and beat second-quarter expectations. Same-store revenue and profit were still slightly down, but average move-in rents turned positive for the first time since 2021, and management sees revenue growth turning positive in the fourth quarter.
Raised guidance and improving rents are the clearest new signal on PSA's earnings direction.
Rooftop solar adds rental income PSA is leasing about five million square feet of rooftop space for 60 community solar projects in northern Illinois. The panels generate extra lease revenue from space that was otherwise unused, a small but steady boost that also supports its sustainability image.
New solar leasing is a fresh, if modest, source of revenue for PSA.