Public Storage (PSA) reaffirms its leadership in the self-storage REIT sector, driven by sustained occupancy gains, robust rent growth, and disciplined capital allocation. Analysts highlight a resilient business model poised for continued outperformance.
- Same-store occupancy at 95.7% in Q4 2025, up 120 bps YoY
- Average monthly rent growth of 5.8% annually
- NAV per share of $192.30, 22% above current market price
- Debt-to-EBITDA ratio of 5.9x, with 4.1x fixed charge coverage
- Capital allocation of $480M in 2025, projected IRR of 11.5%
- Dividend payout ratio of 72%, with room for future increases
Public Storage (PSA) has emerged as a standout performer in the REIT landscape, with its recent operational metrics underscoring long-term structural advantages. The company reported same-store occupancy of 95.7% in Q4 2025, up 120 basis points year-over-year, reflecting persistent demand for storage solutions across urban and suburban markets. Average monthly rent growth reached 5.8% annually, outpacing inflation and signaling strong pricing power in a sector where tenant retention remains high. The company’s capital efficiency remains a key differentiator, with a net asset value (NAV) per share of $192.30 as of year-end 2025—22% above its current trading price. This discount suggests potential upside for value-oriented investors. PSA’s total debt-to-EBITDA ratio of 5.9x is within the conservative range for the sector, and its fixed charge coverage stands at 4.1x, indicating solid financial flexibility despite rising interest rates. Strategically, PSA continues to expand its footprint through acquisitions and development, with $480 million allocated to new construction and upgrades in 2025. These investments are expected to yield a projected internal rate of return (IRR) of 11.5%, supporting long-term dividend growth. The company has maintained a consistent dividend payout ratio of 72%, well below the 80% threshold typically seen as sustainable for REITs, providing room for future increases. Market participants are taking note: PSA’s share price has risen 18% over the past 12 months, outperforming the broader REIT index by 6 percentage points. The stock is now trading at a 12.3x forward P/FFO multiple, below its 5-year average of 14.1x, suggesting potential undervaluation. Analysts covering PSA have raised price targets to $230, citing resilience in demand and strong balance sheet management.