Eric Lutcho

Eric Lutcho asked about Public Storage's development business, specifically why deliveries have slowed to $300 million this year, attributing it to factors like a tougher lease-up environment or higher development costs. He also inquired about the company's perspective on the evolution of large language models (LLMs) potentially including ads and impacting customer acquisition from traditional paid search.

Answer

Tom Boyle, CFO and CIO, stated that Public Storage is passionate about its development business due to the ability to select sites, design buildings, and integrate them into its operating platform for higher cash flow. He acknowledged navigating a challenging development environment with rising costs and falling rents in some growth markets, leading to anticipated fewer deliveries in 2026 than 2025, but a focus on growing the business over time for strong risk-adjusted returns. Regarding LLMs, Boyle noted increasing consumer use and explained that the PS Next platform aims to interact with customers through LLMs, the website, app, and agents, with exciting internal initiatives planned for the next 6-12 months to leverage these models and meet evolving customer expectations.