Public Storage (NYSE:PSA) Q4 2022 Earnings Call Transcript

Joe Russell: Yes. Mike, the development cycle is long. And I mentioned you’ve got to have the fortitude, particularly in environments or macroeconomic cycles that would and are actually persuading others to not pursue development. We still think that that’s a very good opportunity for us, as I mentioned, to go out and capture even better land sites in some cases, or with our own view and financial capabilities and basically, view of the longer-term value creation we can see through cycles like this. And in many cases, it actually can lead us to opportunities we might not otherwise see. So, that’s the benefit of, again, having our deep-seated knowledge, our very entrenched development and real estate teams nationally out looking for sites and then getting into all of the complications of getting entitlements, approvals, et cetera, and then going through construction processes.

Now, there’s been, and we don’t see any immediate relief to the amount of inflationary pressures that have come through just component costs, whether it’s steel or lumber or anything tied to oil, et cetera. So, there’s a lot of risk that continues to evolve into the development business. But we think that we have uniquely the ability to see through cycles, and we look and make sure that we’ve got enough bandwidth and even in our own underwriting to give us very good capability of not only hitting our expected returns but hopefully exceeding them, particularly if market corrections happen through, again, these ebbs and flows of market cycles. So, we’re always looking and trying to assess what the near- and longer-term market dynamics are but we’ve got the fortitude to do that.

Operator: Thank you. This concludes the question-and-answer portion of our call. And I would now like to turn the call back to Ryan Burke for any additional or closing remarks.

Ryan Burke: Thank you, Chelsea, and thanks to all of you for joining us. Have a great day.

Operator: Thank you, ladies and gentlemen. This does conclude the Public Storage fourth quarter and full year 2022 earnings call. We appreciate your participation. And you may disconnect at any time.