Public Storage: Form 10-Q for the period ended Sep 30, 2026

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements relating to our expected acquisition, disposition, development, and redevelopment activity, including with respect to the integration of acquired assets and operations, supply and demand for our self-storage facilities, information relating to operating trends in our markets, expectations regarding operating expenses, including property tax changes, expectations regarding the impacts from inflation and changes in macroeconomic conditions, our strategic priorities, expectations with respect to financing activities, rental rates, cap rates, and yields, leasing expectations, our credit ratings, settlement of common shares sold pursuant to forward sale confirmations under our At-the-Market (“ATM”) program; and all other statements other than statements of historical fact. Such statements are based on management’s beliefs and assumptions made based on information currently available to management and may be identified by the use of the words “expects,” “believes,” “anticipates,” “should,” “estimates,” and similar expressions.

These forward-looking statements involve known and unknown risks and uncertainties, which may cause our actual results and performance to be materially different from those expressed or implied in the forward-looking statements. Risks and uncertainties that may impact future results and performance include, but are not limited to those risks and uncertainties described in Part 1, Item 1A, “Risk Factors” in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”), in this Quarterly Report on Form 10-Q, and in our other filings with the SEC. These include changes in demand for our facilities, changes in macroeconomic conditions, failure to realize the expected benefits of the NSA and PS Canada acquisitions, unexpected liabilities or expenses related to the NSA or PS Canada acquisitions, challenges to successfully and timely integrate the NSA and PS Canada acquisitions, including difficulties retaining and hiring key personnel, changes in national self-storage facility development activity, impacts from our strategic corporate transformation initiative, impacts of natural disasters, adverse changes in laws and regulations including governing property tax, evictions, rental rates, minimum wage levels, and insurance, adverse economic effects from public health emergencies, international military conflicts, international trade disputes (including threatened or implemented tariffs imposed by the U.S., Canada or other countries), or similar events impacting public health and/or economic activity, increases in the costs of our primary customer acquisition channels, adverse impacts to us and our customers from high interest rates, inflation, unfavorable foreign currency rate fluctuations, or changes in federal or state tax laws related to the taxation of REITs, security breaches, including ransomware, or a failure of our networks, systems, or technology.

These forward-looking statements speak only as of the date of this report or as of the dates indicated in the statements. All of our forward-looking statements, including those in this report, are qualified in their entirety by this cautionary statement. We expressly disclaim any obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, new estimates, or other factors, events or circumstances after the date of these forward-looking statements, except when expressly required by law. Given these risks and uncertainties, you should not rely on any forward-looking statements in this report, or which management may make orally or in writing from time to time, neither as predictions of future events nor guarantees of future performance.

Critical Accounting Estimates

The preparation of consolidated financial statements and related disclosures in conformity with U.S. generally accepted accounting principles (“GAAP”) requires us to make judgments, assumptions, and estimates that affect the amounts reported. On an ongoing basis, we evaluate our estimates and assumptions. These estimates and assumptions are based on current facts, historical experience, and various other factors that we believe are reasonable under the circumstances to determine reported amounts of assets, liabilities, revenues, and expenses that are not readily apparent from other sources.

During the nine months ended September 30, 2026, there were no material changes to our critical accounting estimates as compared to the critical accounting estimates disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025.

Overview

Our self-storage operations generate most of our net income, and our earnings growth is impacted by the levels of organic growth within our Same Store Facilities (as defined below) as well as within our Acquired Facilities and Developed and Expanded Facilities (both as defined below).

Revenues generated by our Same Store Facilities increased by 0.5% ($4.8 million) for the three months ended September 30, 2026 and remained relatively unchanged for the nine months ended September 30, 2026, as compared to the same periods in 2025. Cost of operations for Same Store Facilities increased by 0.4% ($1.0 million) and 1.2% ($9.2 million), respectively, for the three and nine months ended September 30, 2026 as compared to the same periods in 2025. Realized annual rent per occupied square foot for our Same Store Facilities increased by 0.2% for the three months ended September 30, 2026 and decreased by 0.3% for the nine months ended September 30, 2026, while average occupancy increased by 0.3% and 0.2%, respectively, as compared to the same periods in 2025.

We have grown and plan to continue to grow through the acquisition and development of new facilities and expansion of our existing self-storage facilities. Since the beginning of 2024, including the ongoing integration of unstabilized properties acquired prior to 2024, we have expanded our portfolio by a total of 881 facilities with 63.3 million net rentable square feet for a cost of $11.6 billion. Within our non-same store portfolio as of September 30, 2026, our Developed and Expanded Facilities include a total of 121 self-storage facilities with 14.0 million net rentable square feet. For development and expansions completed by September 30, 2026, we incurred a total cost of $1.8 billion. During the three and nine months ended September 30, 2026, combined net operating income generated by our Acquired Facilities and Developed and Expanded Facilities increased 95.6% ($73.3 million) and 52.0% ($107.6 million), respectively, as compared to the same periods in 2025.

Recent Developments

On July 20, 2026, PSOC issued $900 million aggregate principal amount of senior notes at an effective interest rate of 4.855%, including $400 million aggregate principal amount of fixed senior notes bearing interest at an annual rate of 4.700% maturing on February 1, 2032, and $500 million aggregate principal amount of fixed rate senior notes bearing interest at an annual rate of 5.150% maturing on August 15, 2036. The senior notes are guaranteed by Public Storage. We received $886 million of net proceeds from the issuance.

On July 22, 2026, we closed the acquisition of National Storage Affiliates Trust (“NSA”). On September 1, 2026, we completed the acquisition of PS Canada. See Note 3 to our September 30, 2026 consolidated financial statements “Acquisitions”, for more details.

On September 16, 2026, PS Canada Finance ULC, a finance subsidiary of the Company, completed a public offering of C$400 million principal amount of senior notes, bearing interest at an annual rate of 4.540% and maturing on September 16, 2033. The senior notes are guaranteed by Public Storage and PSOC. We received C$398.5 million of net proceeds from the issuance.

As of September 30, 2026, we had outstanding forward sale agreements under our ATM program for a total of 1,230,141 common shares, representing expected net proceeds of approximately $399.2 million (assuming full physical settlement of such agreements).

Results of Operations

Operating Results for the Three Months Ended September 30, 2026 and 2025

For the three months ended September 30, 2026, net income allocable to our common shareholders was $312.3 million or $1.69 per diluted common share, compared to $461.4 million or $2.62 per diluted common share for the same period in 2025, representing a decrease of $149.1 million or $0.93 per diluted common share. The decrease is due primarily to (i) a $122.3 million increase in depreciation expense, (ii) a $114.6 million increase in transaction and integration expenses, (iii) a $22.8 million increase in interest expense, (iv) a $9.5 million increase in general and administrative expense, (v) a $9.1 million decrease in equity in earnings from unconsolidated real estate entities, and a (vi) $7.7 million increase in net income allocated to noncontrolling interests, partially offset by (vii) a $76.5 million increase in self-storage net operating income, (viii) an increase of $26.5 million related to gains on sale of real estate through eminent domain proceedings, (ix) a $19.6 million increase in ancillary net operating income and a (x) $17.9 million decline in income tax expense primarily due to the release of a valuation allowance.

The $76.5 million increase in self-storage net operating income for the three months ended September 30, 2026 as compared to the same period in 2025 is primarily a result of a $72.8 million increase attributable to our Non-Same Store Facilities (as defined below) reflecting the impact of newly acquired facilities and the lease-up of development/expansion properties,

Operating Results for the Nine Months Ended September 30, 2026 and 2025

For the nine months ended September 30, 2026, net income allocable to our common shareholders was $1.2 billion or $6.92 per diluted common share, compared to $1.1 billion or $6.42 per diluted common share for the same period in 2025, representing an increase of $110.7 million or $0.50 per diluted common share. The increase is due primarily to (i) a $282.6 million increase in foreign currency gain primarily associated with our euro-denominated notes payable, (ii) a $95.3 million increase in self-storage net operating income, (iii) a $32.9 million increase in ancillary net operating income, (iv) an increase of $26.6 million related to gains on sale of real estate through eminent domain proceedings, and (v) an $18.2 million decline in income tax expense primarily due to the release of a valuation allowance, partially offset by (vi) a $134.8 million increase in depreciation and amortization expense, (vii) a $119.3 million increase in transaction and integration expenses, (viii) a $44.0 million increase in interest expense, (ix) a $28.6 million increase in general and administrative expense and (x) a $7.8 million increase in net income allocated to to noncontrolling interests.

The $95.3 million increase in self-storage net operating income for the nine months ended September 30, 2026 as compared to the same period in 2025 is a result of a $105.8 million increase attributable to our Non-Same Store Facilities reflecting the impact of newly acquired facilities and the lease-up of development/expansion properties partially offset by a decrease of $10.5 million attributable to our Same Store Facilities as a result of increased cost of operations primarily due to increased property tax expense.

Funds from Operations (“FFO”) and FFO per diluted common share and unit holders (“FFO per share and unit”) are non-GAAP measures defined by Nareit. We believe that FFO and FFO per share and unit are useful to REIT investors and analysts in measuring our performance because Nareit’s definition of FFO excludes items included in net income that do not relate to or are not indicative of our operating and financial performance. FFO represents net income before real estate-related depreciation and amortization, which is excluded because it is based upon historical costs and assumes that building values diminish ratably over time, while we believe that real estate values fluctuate due to market conditions. FFO also excludes gains or losses on sale of real estate assets and real estate impairment charges, which are also based upon historical costs and are impacted by historical depreciation. FFO and FFO per share and unit are not a substitute for net income or earnings per share. FFO is not a substitute for net cash flow in evaluating our liquidity or ability to pay dividends, because it excludes investing and financing activities presented on our consolidated statements of cash flows. In addition, other REITs may compute these measures differently, so comparisons among REITs may not be helpful.

For the three months ended September 30, 2026, FFO was $3.81 per diluted common share as compared to $4.33 per diluted common share for the same period in 2025, representing a decrease of 12.0%, or $0.52 per diluted common share.

For the nine months ended September 30, 2026, FFO was $12.39 per diluted common share as compared to $11.48 per diluted common share for the same period in 2025, representing an increase of 7.9%, or $0.91 per diluted common share.

We also presents “Core FFO” and “Core FFO per share and unit” non-GAAP measures that represent FFO and FFO per share excluding the impact of (i) foreign currency exchange gains and losses, (ii) charges related to the redemption of preferred shares, (iii) transaction and integration costs related to the NSA acquisition and PS Canada acquisition, (iv) certain other non-cash and/or nonrecurring income or expense items primarily representing, with respect to the periods presented below, the impact of corporate transformation costs, loss contingencies, due diligence costs incurred in pursuit of strategic transactions, cancelled project write-off, realized or unrealized gain or loss on private equity investments and non-hedge designated derivative transactions, income tax benefits from certain discrete items, certain CEO transition-related and executive severance costs, and amortization of assumed debt discounts and acquired non real estate-related intangibles, and (v) the income tax effect of each adjustment calculated by applying the tax rate of the applicable tax jurisdiction. We review Core FFO and Core FFO per share and unit to evaluate our ongoing operating performance, and believe they are used by investors and REIT analysts in a similar manner. However, Core FFO and Core FFO per share and unit are not substitutes for net income and net income per share. Because other REITs may not compute Core FFO or Core FFO per share and unit in the same manner as we do, may not use the same terminology, or may not present such measures, Core FFO and Core FFO per share may not be comparable among REITs.

The following table reconciles net income to FFO and Core FFO and reconciles diluted earnings per share to FFO per share and unit and Core FFO per share and unit:

(Amounts in thousands, except per share data)

Reconciliation of Net Income to FFO and Core FFO:

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Analysis of Net Income — Self-Storage Operations

Our self-storage operations are analyzed in four groups: (i) 2,755 facilities that we have owned and operated on a stabilized basis since January 1, 2024 (the “Same Store Facilities”) and, (ii) 881 facilities we acquired since January 1, 2024 or that were acquired prior to 2024 that remain unstabilized since January 1, 2024 (the “Acquired Facilities”), (iii) 121 facilities that have been developed or expanded since January 1, 2021 including those developed or expanded earlier that remain unstabilized since January 1, 2024, or properties that will commence expansion by December 31, 2026 (the “Developed and Expanded Facilities”), and (iv) 15 other facilities, which are otherwise not stabilized with respect to occupancies or rental rates since January 1, 2024 (the “Other Non-Same Store Facilities”). The Acquired Facilities, Developed and Expanded Facilities, and Other Non-Same Store Facilities are collectively referred to as the “Non-Same Store Facilities”. See Note 16 to our September 30, 2026 consolidated financial statements “Segment Information,” for a reconciliation of the amounts in the tables below to our total net income.

(Dollar amounts and square footage in thousands)

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(a) Represents the absolute nominal change with respect to square foot occupancy, and the percentage change with respect to all other items.

(b) Revenues and cost of operations do not include tenant reinsurance and merchandise sale revenues and expenses generated at the facilities. See “Ancillary Operations” below for more information.

(c) Net operating income or “NOI” is a non-GAAP financial measure that excludes the impact of depreciation and amortization expense, which is based upon historical real estate costs and assumes that building values diminish ratably over time, while we believe that real estate values fluctuate due to market conditions. We utilize NOI in determining current property values, evaluating property performance, and evaluating property operating trends. We believe that investors and analysts utilize NOI in a similar manner. NOI is not a substitute for net income, operating cash flow, or other related financial measures, in evaluating our operating results. See Note 16 to our September 30, 2026 consolidated financial statements for a reconciliation of NOI to our total net income for all periods presented.

(d) Annual contract rent: Represents the agreed upon monthly rate that is paid by our customers in place at the time of

measurement. Contract rates are initially set in the lease agreement upon move-in, and we adjust them from time to time with notice. Contract rent excludes other fees that are charged on a per-item basis, such as late charges and administrative fees, does not reflect the impact of promotional discounts, and does not reflect the impact of rents that are written off as uncollectible.

Same Store Facilities

The Same Store Facilities consist of facilities we have owned and operated on a stabilized level of occupancy, revenues, and cost of operations since January 1, 2024. Our Same Store Facilities increased from 2,565 facilities at December 31, 2025 to 2,755 at September 30, 2026. The composition of our Same Store Facilities allows us more effectively to evaluate the ongoing performance of our self-storage portfolio in 2024, 2025, and 2026 and exclude the impact of fill-up of unstabilized facilities, which can significantly affect operating trends. We believe investors and analysts use Same Store Facilities information in a similar manner. However, because other REITs may not compute Same Store Facilities in the same manner as we do, may not use the same terminology or may not present such a measure, Same Store Facilities may not be comparable among REITs.

The following table summarizes the historical operating results (for all periods presented) of these 2,755 facilities (192.1 million net rentable square feet) that represent approximately 71% of the aggregate net rentable square feet of our U.S. consolidated self-storage portfolio at September 30, 2026. It includes various measures and detail that we do not include in the analysis of the developed, acquired, and other Non-Same Store Facilities, due to the relative magnitude and importance of the Same Store Facilities relative to our other self-storage facilities.

Selected Operating Data for the Same Store Facilities (2,755 facilities)

(Dollar amounts in thousands, except for per square foot data)

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(a) Revenues and cost of operations do not include tenant reinsurance and merchandise sale revenues and expenses generated at the facilities. See “Ancillary Operations” below for more information.

(b) Direct net operating income (“Direct NOI”), a subtotal within NOI, is a non-GAAP financial measure that excludes the impact of supervisory payroll, centralized management costs, and share-based compensation in addition to depreciation and amortization expense. We utilize direct net operating income in evaluating property performance and in evaluating property operating trends as compared to our competitors.

(c) Realized annual rent per occupied square foot is computed by dividing 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 rental income, before late charges and administrative fees, by the total available net 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) Annual contract rent represents the agreed upon monthly rate that is paid by our customers in place at the time of measurement. Contract rates are initially set in the lease agreement upon move-in, and we adjust them from time to time with notice. Contract rent excludes other fees that are charged on a per-item basis, such as late charges and administrative fees, does not reflect the impact of promotional discounts, and does not reflect the impact of rents that are written off as uncollectible.

(e) Represents the absolute nominal change with respect to gross margin and square foot occupancy, and the percentage change with respect to all other items.

Analysis of Same Store Revenue

We believe a balanced occupancy and rate strategy maximizes our revenues over time. We regularly adjust rental rates and promotional discounts offered (generally, “$1.00 rent for the first month”), as well as our marketing efforts to maximize revenue from new customers to replace customers that vacate. We evaluate the market place and over time increase rents for our existing customers. As a result, the number of long-term customers we have in our facilities is an important factor in our revenue growth.

Revenues generated by our Same Store Facilities increased 0.5% for the three months ended September 30, 2026 and remained relatively unchanged for the nine months ended September 30, 2026, as compared to the same periods in 2025. Revenues for the three months ended September 30, 2026 increased primarily due to a 0.2% increase in realized annual rent per occupied square foot and a 0.3% increase in average occupancy, partially offset by a 0.5% decrease in Late Charges and Administrative Fees as compared to the same period in 2025. Revenues remained relatively unchanged for the nine months ended September 30, 2026 due primarily to a 0.3% decrease in realized annual rent per occupied square foot and a 2.0% decrease in Late Charges and Administrative Fees, partially offset by a 0.2% increase in average occupancy, as compared to the same period in 2025.

The 0.2% increase in realized annual rent per occupied square foot for the three months ended September 30, 2026, as compared to the same period in 2025, reflected improved rental rates charged to new customers, including a 9.3% increase in average annual contract rent per square foot for customers moving in during the period. For the nine months ended September 30, 2026, realized annual rent per occupied square foot decreased 0.3% as compared to the same period in 2025, as the impact of improved rental rates during the third quarter was more than offset by lower realized rents during the first half of 2026. The weighted average square foot occupancy for our Same Store Facilities was 92.2% and 92.0% for the three and nine months ended September 30, 2026, respectively, representing an increase of 0.3% and 0.2%, respectively, due primarily to lower move-out activity and reduced customer churn.

Move-out activities from our customers decreased for the three and nine months ended September 30, 2026 as compared to the same periods in 2025. Move-out average annual contract rent per square foot decreased for the three and nine months ended September 30, 2026, as compared to the same periods in 2025.

Selected Key Move-in and Move-Out Statistical Data

The following table sets forth average annual contract rent per square foot and total square footage for customers moving in and moving out and churn during the three and nine months ended September 30, 2026 and 2025. Contract rents gained from move-ins and contract rents lost from move-outs included in the table assume move-in and move-out activities occur at the beginning of each period presented. Churn is defined as units moved out during the period, divided by starting occupied units at the beginning of the period. The table also includes promotional discounts, which vary based upon the move-in contractual rates, move-in volume, and percentage of customers moving in who receive the discount.

(Amounts in thousands, except for per square foot amounts)

(a) Represents the absolute nominal change with respect to churn, and the percentage change with respect to all other items.

Analysis of Same Store Cost of Operations

Cost of operations (excluding depreciation and amortization) increased 0.4% and 1.2% for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in 2025. The increase for the three months ended September 30, 2026 was due to increased repairs and maintenance expense and marketing costs partially offset by lower indirect costs of operations. The increase for the nine months ended September 30, 2026, was due to increased property tax expense, repairs and maintenance and marketing expense partially offset by lower indirect cost of operations.

Property tax expense decreased 0.8% for the three months ended September 30, 2026, as compared to the same period in 2025, as a result of refunds received during the quarter. Property tax expense increased 1.4% for the nine months ended September 30, 2026, as a result of higher assessed values.

Marketing expense includes internet advertising we utilize through our online paid search programs and the operating costs of our website and telephone reservation center. Internet advertising expense, comprising keyword search fees assessed on a “per click” basis, varies based upon demand for self-storage space, the quantity of people inquiring about self-storage through online search, occupancy levels, the number and aggressiveness of bidding competitors, and other factors. These factors are volatile; accordingly, Internet advertising can increase or decrease significantly in the short-term. Our marketing expense increased by 12.5% and 4.6% for the three and nine months ended September 30, 2026 as compared to the same periods in 2025. The increase in marketing expense is due to utilizing a higher volume of online paid search programs to attract new tenants.

Repairs and maintenance expense increased 17.4% and 4.2% for the three and nine months ended September 30, 2026 as compared to the same periods in 2025. Repairs and maintenance expense levels are dependent upon many factors such as (i) damage and equipment malfunctions, (ii) short-term local supply and demand factors for material and labor, and (iii) weather conditions, which can impact costs such as snow removal, roof repairs, and HVAC maintenance and repairs.

Indirect Cost of Operations represents costs related to our supervisory payroll, centralized management costs, and share-based compensation. Indirect Cost of Operations decreased 11.2% and 1.0% for the three and nine months ended September 30, 2026, respectively as compared to the same periods in 2025, primarily due to increased non-same store count and elevated share-based compensation forfeitures.

Acquired Facilities

The Acquired Facilities represent 707 facilities that we acquired in 2026, 2025, and 2024, and 174 facilities that we acquired before 2024 that have not fully stabilized. As a result of the stabilization process and timing of when these facilities were acquired, year-over-year changes can be significant. The following table summarizes the acquisition costs with respect to the Acquired Facilities:

We have been active in acquiring facilities in recent years. Our Acquired Facilities includes a total of 881 facilities with 63.3 million net rentable square feet for a total cost of $11.6 billion. During the three and nine months ended September 30, 2026, these facilities contributed net operating income of $113.7 million and $213.8 million, respectively.

Strategic Acquisitions are a component of Acquired Facilities which represents 550 facilities related to our acquisitions of NSA and PS Canada. During the three months ended September 30, 2026 these facilities contributed net operating income of $58.6 million.

We remain active in seeking to acquire additional self-storage facilities. Future acquisition volume may be impacted by cost of capital and overall macro-economic uncertainties. During the nine months ended September 30, 2026, we acquired 598 self-storage facilities across 28 states and Canada with 40.5 million net rentable square feet for $7.3 billion. Subsequent to September 30, 2026, we acquired or were under contract to acquire 17 self-storage facilities across twelve states with 1.3 million net rentable square feet for $211.5 million. Our total acquisitions planned or completed through September 30, 2026, excluding the acquisitions of NSA and PS Canada, amount to $713.2 million.

Developed and Expanded Facilities

The Developed and Expanded Facilities include 113 facilities that were developed on new sites or expanded to increase their net rentable square footage that are not fully stabilized and 8 expansion projects that are currently in process at September 30, 2026. The following table summarizes the development costs with respect to the Developed and Expanded Facilities:

Our Developed and Expanded Facilities includes a total of 121 self-storage facilities with 14.0 million net rentable square feet. For development and expansions completed by September 30, 2026, we incurred a total cost of $1.8 billion. During the three and nine months ended September 30, 2026, Developed and Expanded Facilities contributed net operating income of $36.3 million and $100.9 million, respectively.

It typically takes at least three to four years for a newly developed or expanded self-storage facility to stabilize with respect to revenues. Physical occupancy can be achieved as early as two to three years following completion of the development or expansion through offering lower rental rates during fill-up. As a result, even after achieving high occupancy, there can still be a period of elevated revenue growth as the customer base matures and higher rental rates are achieved.

We believe that our development and redevelopment activities generate favorable risk-adjusted returns over the long run. However, in the short run, our earnings are diluted during the construction and stabilization period due to the cost of capital to fund the development cost, the related construction and development overhead expenses included in general and administrative expense, and the net operating loss from newly developed facilities undergoing fill-up.

We expect to add a total of 1.3 million net rentable square feet of storage space by expanding existing self-storage facilities for an aggregate development cost of approximately $217.8 million. At September 30, 2026, we had 37 additional facilities in development, which we expect will have a total of 3.3 million net rentable square feet of storage space and have an aggregate development cost of approximately $571.2 million. We expect these facilities to open over the next 18 to 24 months.

As of September 30, 2026, we have ongoing development and expansion projects that we estimate will have an aggregate development cost of approximately $789.0 million.

Other Non-Same Store Facilities

The “Other Non-Same Store Facilities” represent facilities damaged in casualty events such as hurricanes, floods, and fires.

The Other Non-Same Store Facilities have an aggregate of 1.0 million net rentable square feet at September 30, 2026. As of September 30, 2026 and 2025, the average occupancy for these facilities totaled 85.3% and 77.4%, respectively, and the annual contract rent per occupied square foot totaled $16.62 and $18.49 as of September 30, 2026 and 2025, respectively.

Depreciation and amortization expense

Depreciation and amortization expense for Self-Storage Operations increased $113.6 million and $126.2 million for the three and nine months ended September 30, 2026, as compared to the same period in 2025, primarily due to acquired facilities and newly developed and expanded facilities.

Ancillary Operations

Ancillary revenues and expenses include amounts associated with the reinsurance of policies against losses to goods stored by customers in our self-storage facilities, sale of merchandise at our self-storage facilities, and management fees related to properties we manage through our joint venture investments and agreements with unrelated third parties. Ancillary revenues and expenses also include amounts related to Strategic Acquisitions. During the period ended September 30, 2026, Ancillary net operating income related to our Strategic Acquisitions was $9.2 million. The following table sets forth our ancillary operations:

(Amounts in thousands)

Tenant reinsurance operations: Tenant reinsurance premium revenue increased 20.4% and 14.6% for the three and nine months ended September 30, 2026, respectively, over the same periods in 2025, as a result of an increase in our customer base with respect to acquired, newly developed, and expanded facilities and the third party properties we manage, as well as higher insurance coverage and premium rates in our customers base at our same store facilities. Tenant reinsurance premium revenue generated from customers at our Same Store Facilities were $54.7 million and $159.7 million for the three and nine months ended September 30, 2026, respectively, representing a 7.6% and 6.9% increase, respectively, over the same periods in 2025.

Cost of operations primarily includes claims paid as well as claims adjustment expenses. Claims expenses vary based upon the number of insured customers and the volume of events that drive covered losses, such as burglary, as well as catastrophic weather events affecting properties such as hurricanes and floods. Tenant reinsurance cost of operations increased 3.5% and 3.9% for the three and nine months ended September 30, 2026, respectively, as compared the same periods in 2025, primarily due to increased claim volumes and expenses related to flooding and burglary as well as increased access fees we paid to the third-party owners of properties we manage driven by the significant growth of our third-party property management program.

We expect tenant reinsurance operations to grow as we roll out insurance policies with increased coverage and higher premiums in 2026, and as we continue to increase the customers base at our newly acquired and developed facilities.

Management Fees: At September 30, 2026, in our property management program, we managed 417 facilities (30.8 million net rentable square feet) for unrelated third parties and were under contract to manage 76 additional facilities (4.6 million net rentable square feet), including 70 facilities that are currently under construction. As part of the NSA acquisition we acquired management contracts to manage properties in various joint ventures. Management fees increased $13.6 million and $19.1 million for the three and nine months ended September 30, 2026, respectively, as compared to 2025, primarily as a result of the new management agreements acquired during the period.

Analysis of items not allocated to segments

Equity in earnings (loss) of unconsolidated real estate entities: We account for our equity investment in Shurgard, the Legacy NSA JVs, and the PS-NSA JV, using the equity method and record our pro-rata share of net income. For the three and nine months ended September 30, 2026, we recognized a loss of $5.5 million and earnings of $6.3 million, respectively, as compared to earnings of $3.7 million and $5.1 million for the same periods in 2025. Included in our equity earnings were $28.9 million and $51.1 million of our share of depreciation and amortization expense for the three and nine months ended September 30, 2026, respectively, as compared to $14.7 million and $45.7 million for the same periods in 2025. The increase from the prior year in depreciation was due to the addition of the Legacy NSA JVs and PS-NSA JV. The decline in equity in earnings for the three months ended September 30, 2026 was primarily attributable to incremental depreciation and amortization associated with these investments.

Real estate acquisition and development expense: For the three and nine months ended September 30, 2026, we incurred a total of $4.3 million and $11.9 million, respectively, of internal and external expenses related to our acquisition and development of real estate facilities, as compared to $2.8 million and $12.8 million for the same periods in 2025. These amounts are net of $4.2 million and $10.2 million for the three and nine months ended September 30, 2026, respectively, in development costs that were capitalized to newly developed and redeveloped self-storage facilities, as compared to $3.5 million and $10.3 million for the same periods in 2025. The year-over-year change of real estate acquisition and development expense was primarily due to the recognition of a $3.9 million impairment write-down of certain land development parcels that were marketed for sale during the nine months ended September 30, 2025, as compared to a $0.2 million impairment recovery for the same period in 2026.

General and administrative expense: For the three and nine months ended September 30, 2026, general and administrative expense increased $9.5 million and $28.6 million, respectively, as compared to the same periods in 2025. The $28.6 million year-over-year increase was primarily related to (i) a $15.2 million increase in executive severance and CEO transition costs, (ii) a $4.9 million increase in corporate transformation costs and (iii) a $3.5 million increase in executive labor costs costs.

As part of our operating model transformation, we have launched a corporate transformation initiative focused on modernization and growth. This includes streamlining our processes through technology and expanding our geographic footprint with a stronger corporate presence in offshore locations and relocation of our principal office from California to Texas. The initiative is intended to transform our corporate functions improving efficiency and productivity.

We expect to incur corporate transformation costs of approximately $15 to $20 million as we complete the initiative over the next three years. Beginning in 2026, we believe this restructuring plan will result in future annual cost savings of approximately $3 to $5 million, although the amount and timing of such savings are subject to change depending on a variety of factors.

Transaction and Integration Costs: During the nine months ended September 30, 2026, we incurred transaction and integration costs related to the acquisitions of NSA and PS Canada, of which $119.3 million was recognized as an expense in the Consolidated Statements of Income.

Gain on Sale of Real Estate: During the nine months ended September 30, 2026, we recorded $27.4 million in gains, primarily in connection with the disposition of a real estate facility pursuant to eminent domain proceedings.

Interest and other income (expense): The following table sets forth our interest and other income (expense):

(Amounts in thousands)

Interest earned on cash balances was relatively flat for the three months ended September 30, 2026 and decreased $4.8 million during the nine months ended September 30, 2026 as compared to the same periods in 2025, due primarily to lower average cash balances. As described in Note 8, during the nine months ended September 30, 2026, we incurred $5.9 million in unrealized losses on swaps that did not qualify for hedge accounting. The swaps were subsequently modified and designated as cash flow hedges in the second quarter.

Interest expense: For the three and nine months ended September 30, 2026, we incurred $104.0 million and $271.2 million, respectively, of interest on our outstanding notes payable, as compared to $81.6 million and $228.3 million for the same periods in 2025. In determining interest expense, these amounts were offset by capitalized interest of $1.5 million and $3.9 million during the three and nine months ended September 30, 2026, respectively, associated with our development activities, as compared to $1.9 million and $5.0 million for the same periods in 2025. The increase of interest expense for the three and nine months ended September 30, 2026 as compared to the same periods in 2025 is due to the issuance of U.S. Dollar, Canadian Dollar and euro-denominated unsecured notes in 2025 and 2026 partially offset by $0.2 million of interest expense benefit amortized from accumulated other comprehensive income from settled interest rate swaps designated as cash flow hedges. At September 30, 2026, we had $12.1 billion of notes payable outstanding, with a weighted average interest rate of approximately 3.6%.

Foreign currency exchange gain (loss): For the three and nine months ended September 30, 2026, we recorded foreign currency gains of $9.9 million and $68.7 million, respectively, representing primarily the changes in the U.S. Dollar equivalent of our Euro-denominated unsecured notes due to fluctuations in exchange rates, as compared to foreign currency gains of $0.9 million and losses of $213.9 million, for the three and nine months ended September 30, 2025, respectively. Future gains and losses on foreign currency will be dependent upon changes in the relative value of the Euro to the U.S. Dollar and the level of Euro-denominated notes payable outstanding.

Income tax (provision) benefit: We operate as a REIT for U.S. federal income tax purposes. As a REIT, we are generally not subject to U.S. federal income taxes on our taxable income distributed to shareholders. For the three and nine months ended September 30, 2026, we recorded income tax benefits totaling $15.0 million and $10.8 million, respectively compared to income tax provisions of $2.8 million and $7.5 million for the same periods in 2025. The year-over-year change was primarily driven by a $16.7 million deferred tax benefit resulting from the partial release of a valuation allowance on deferred tax assets, primarily related to federal solar tax credits, in connection with deferred tax liabilities recognized in the NSA acquisition, partially offset by state, foreign and TRS income taxes.

Liquidity and Capital Resources

Overview and our Sources of Capital

Our annual operating retained cash flow was approximately $566 million in 2025 and $400 million in 2024. Retained operating cash flow represents our expected cash flow provided by operating activities (including property operating costs and interest payments described below), less shareholder distributions and capital expenditures. We expect retained cash flow to be favorable or at least consistent with those attained in the prior year.

Capital needs in excess of retained cash flow are met with: (i) medium and long-term debt, (ii) preferred equity, (iii) limited partnership interests, (iv) our commercial paper program and credit facility and (v) common equity, including our ATM program. We select among these sources of capital based upon relative cost, availability, the desire for leverage, and considering potential constraints caused by certain features of capital sources, such as debt covenants.

We endeavor to maintain a strong financial profile characterized by strong credit metrics, including low leverage relative to our total capitalization and operating cash flows. We are one of the highest rated REITs, as rated by major rating agencies Moody’s and Standard & Poor’s. Our senior notes payable have an “A” credit rating by Standard & Poor’s and “A2” by Moody’s. Our credit ratings on each of our series of preferred shares are “A3” by Moody’s and “BBB+” by Standard & Poor’s. Our credit profile enables us to effectively access both the public and private capital markets to raise capital.

Our revolving line of credit has a borrowing limit of $3.0 billion. As of September 30, 2026, there were no borrowings outstanding on the revolving line of credit. We do have approximately $40.2 million of outstanding letters of credit, which reduce the amount otherwise available for borrowing under the revolving line of credit. Our line of credit matures on June 25, 2030.

Pursuant to our ATM program, we may, from time to time, sell common shares through participating agents up to an aggregate gross sales price of $2.0 billion on the open market or in privately negotiated transactions. Since the inception of the program in December 2024, we have issued a total of 184,390 common shares on the open market for an aggregate gross sales price of $61.4 million and received net proceeds of approximately $60.3 million after issuance costs. During the nine months ended September 30, 2026, we entered into forward sales agreements under our ATM program for a total of 1,230,141 common shares representing expected gross proceeds of $401.7 million and net proceeds of $399.2 million. After giving effect to these forward sales agreements, approximately $1.5 billion remained available for future sales under our ATM program as of September 30, 2026.

We believe that we have significant financial flexibility to adapt to changing conditions and opportunities, and we have significant access to sources of capital including debt and preferred equity. Based on our strong credit profile and our substantial current liquidity relative to our capital requirements noted below, we would not expect any potential capital market dislocations to have a material impact upon our expected capital and growth plans over the next 12 months. However, if capital market conditions deteriorate significantly for a long period of time, our access to or cost of debt and preferred equity capital could be negatively impacted and potentially affect future investment activities.

Our current and expected capital resources include: (i) $560.4 million of cash as of September 30, 2026, (ii) unsettled forward sales agreements under our ATM program representing expected net proceeds of $399.2 million, and (iii) approximately $600 million of expected retained operating cash flow over the next twelve months based on 2026 operating results which are expected to continue or improve. Additionally, we had $3.0 billion of revolving line of credit, and $800 million of commercial paper note available borrowing capacity at September 30, 2026. We believe that the cash provided by our operating activities will continue to be sufficient to enable us to meet our ongoing cash requirements for interest payments on debt, maintenance capital expenditures, and distributions to our shareholders for the foreseeable future.

As described below, as of September 30, 2026, our current committed cash requirements consist of (i) $211.5 million in property acquisitions currently under contract, (ii) $466.6 million of remaining spending on our current development pipeline, which will be incurred primarily in the next 18 to 24 months, (iii) unfunded loan commitments of $23.1 million under the lending program expected to close in the next twelve months, (iv) approximately $2.1 billion in scheduled principal repayments on our unsecured notes and outstanding commercial paper in the next twelve months, and (v) $74.1 million in unfunded commitments related to our private equity and joint venture investments. We plan to refinance these unsecured notes as they come due through either cash generated from operations, the issuance of additional debt, settlement of our forward sale ATM contracts or borrowings under the Company's credit facility.

Over the long term, to the extent that our cash requirements exceed our capital resources, we believe we have a variety of possibilities to raise additional capital including issuing common or preferred securities, debt, and limited partnership interests, or entering into joint venture arrangements to acquire or develop facilities.

Cash Requirements

The following summarizes our expected material cash requirements, which comprise (i) contractually obligated expenditures, including payments of principal and interest, (ii) other essential expenditures, including property operating expenses, maintenance capital expenditures and dividends paid in accordance with REIT distribution requirements, and (iii) opportunistic expenditures, including acquisitions and developments and repurchases of our securities. We expect to satisfy these cash requirements through operating cash flow and opportunistic debt and equity financings.

Required Debt Repayments: As of September 30, 2026, the principal outstanding on our long-term debt totaled approximately $12.1 billion, consisting of $9.6 billion of U.S. Dollar denominated unsecured notes payable, $2.0 billion of Euro-denominated unsecured notes payable, $281.6 million of Canadian-denominated unsecured notes payable, and $174.4 million of mortgage notes payable. In addition, we had $200.0 million of commercial paper outstanding as of September 30, 2026. Approximate principal maturities and interest payments are as follows:

(Amounts in Thousands)

We have $650.0 million, $700.0 million, and $500.0 million of our U.S. Dollar denominated unsecured notes that mature on November 9, 2026, April 16, 2027, and September 15, 2027, respectively. We plan to repay these notes as they come due through either cash generated from operations or the issuance of additional debt.

Capital Expenditure Requirements: Capital expenditures include capital expenditures to maintain real estate facilities, such as general maintenance, major repairs, or replacements to elements of our facilities to keep our facilities in good operating condition and maintain their visual appeal, as well as capital expenditures for property enhancements and energy-efficient upgrades. Capital expenditures do not include costs relating to the development of new facilities or redevelopment of existing facilities to increase their available rentable square footage.

We spent $117 million on capital expenditures to maintain real estate facilities in the nine months ended September 30, 2026, and expect to spend approximately $170 million for the full year 2026. In addition to maintenance, we spent approximately $34 million during the nine months ended September 30, 2026 on property enhancements, such as acquisition rebrandings and commercial conversions. Lastly, we spent $47 million on energy efficient upgrades through the installation of solar panels, heat pumps, and LED lights in the nine months ended September 30, 2026, and expect to spend approximately $60 million for the full year 2026.

We believe the capital spent to install solar panels, heat pumps, and LED lights will significantly reduce electricity consumption resulting in lower utility costs.

Requirement to Pay Distributions: For all periods presented herein, we have elected to be treated as a REIT, as defined in the Internal Revenue Code. For each taxable year in which we qualify for taxation as a REIT, we will not be subject to U.S. federal corporate income tax on our “REIT taxable income” (generally, taxable income subject to specified adjustments, including a deduction for dividends paid and excluding our net capital gain) that is distributed to our shareholders. We believe we have met these requirements in all periods presented herein, and we expect to continue to qualify as a REIT. Our consistent, long-term dividend policy has been to distribute our taxable income. Future quarterly distributions with respect to the common shares will continue to be determined based upon our REIT distribution requirements after taking into consideration distributions to the preferred shareholders and will be funded with cash flows from operating activities.

The annual distribution requirement with respect to our preferred shares outstanding at September 30, 2026 is approximately $217.6 million per year.

Real Estate Investment Activities: We continue to seek to acquire additional self-storage facilities from third parties. Subsequent to September 30, 2026, we acquired or were under contract to acquire 17 self-storage facilities across twelve states with 1.3 million net rentable square feet for $211.5 million.

As of September 30, 2026, we had development and expansion projects at a total cost of approximately $788.9 million. Costs incurred through September 30, 2026 were $322.3 million, with the remaining cost to complete of $466.6 million expected to be incurred primarily in the next 18 to 24 months. Some of these projects are subject to contingencies such as entitlement approval. We expect to continue to seek to add projects to maintain and increase our robust pipeline. Our ability to do so continues to be challenged by various constraints such as difficulty in finding projects that meet our risk-adjusted yield expectations and challenges in obtaining building permits for self-storage facilities in certain municipalities.

Financing and Capital Commitments: We offer loan financing, primarily through bridge loans, to third-party self-storage owners for operating properties that we manage. As of September 30, 2026, we had unfunded loan commitments of $23.1 million expected to close in the next twelve months, subject to the satisfaction of certain conditions. Additionally, we have unfunded commitments related to our private equity and joint venture investments totaling $74.1 million at September 30, 2026, which may be called at any time during the prescribed time periods.

Property Operating Expenses: The direct and indirect cost of our operations impose significant cash requirements. Direct operating costs include property taxes, on-site property manager payroll, repairs and maintenance, utilities, and marketing. Indirect operating costs include supervisory payroll and centralized management costs. The cash requirements from these operating costs will vary year to year based on, among other things, changes in the size of our portfolio and changes in property tax rates and assessed values, wage rates, and marketing costs in our markets.

The Company is exposed to interest rate changes associated with our unsecured credit facility and other variable rate debt as well as refinancing risk on our fixed rate debt. The Company’s involvement with derivative financial instruments is limited and we do not expect to use them for trading or other speculative purposes. The Company uses derivative instruments to manage its exposure to interest rates and foreign exchange rates. See our Annual Report on Form 10-K for the year ended December 31, 2025 under the heading “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” for a more complete discussion of our interest rate sensitive assets and liabilities. As of September 30, 2026, our market risk has not changed materially from the amounts reported in our Annual Report on Form 10-K for the year ended December 31, 2025, except for the additional interest rate and cross currency swaps executed during the nine months ended September 30, 2026, and the debt issuances, which are described further in Note 9.

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports we file and submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in accordance with SEC guidelines and that such information is communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure based on the definition of “disclosure controls and procedures” in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures in reaching that level of reasonable assurance. We also have an investment in a certain unconsolidated real estate entity and because we do not control the entity, our disclosure controls and procedures with respect to such entity are substantially more limited than those we maintain with respect to our consolidated subsidiaries.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures, as required by Exchange Act Rule 13a-15(b), as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective, at a reasonable assurance level.

Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In addition to the other information in this Quarterly Report on Form 10-Q, you should carefully consider the risks described in our Annual Report on Form 10-K filed for the year ended December 31, 2025, in Part I, Item 1A, Risk Factors, and in our other filings with the SEC. These factors may materially affect our business, financial condition and operating results. There have been no material changes to the risk factors relating to the Company disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, and the risk factors described in the “Risk Factors” section in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2026 and June 30, 2026, other than those disclosed below.

In addition, in considering the forward-looking statements contained in this Quarterly Report on Form 10-Q and elsewhere, you should refer to the qualifications and limitations on our forward-looking statements that are described in Forward-Looking Statements at the beginning of Part I, Item 2 of this Quarterly Report on Form 10-Q.

We may be unable to successfully integrate the operations of NSA and PS Canada with ours and may not realize the anticipated synergies and other benefits of the transactions or do so within the anticipated time frame.

We expect to realize synergies and other benefits from our recent acquisitions of NSA and PS Canada. However, we have been devoting significant management attention and resources to integrating the operations of these companies with our own and expect to continue to do so in the future. Potential difficulties we may encounter in the integration process include the following:

• the inability to successfully combine the businesses with ours in a manner that permits us to achieve the cost savings anticipated to result from the transactions;
• the failure to integrate operations and internal systems, programs and controls;
• loss of customers, joint venture partners and other commercial relationships;
• the complexities associated with managing the combined company, including the complexity of managing related joint ventures;
• the additional complexities of combining companies with different histories, cultures, markets, strategies and customer bases;
• the failure to retain key employees;
• the disruption of ongoing businesses or inconsistencies in services, standards, controls, procedures and policies;
• potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the transactions; and
• performance shortfalls as a result of the diversion of management’s attention caused by the acquisitions and integration.

Any of these risks could adversely affect our ability to maintain relationships with customers, vendors, employees and other commercial relationships. As a result, the anticipated benefits of the transactions may not be realized fully within the expected time frame or at all or may take longer to realize or cost more than expected, which could adversely affect our business, financial condition, results of operations and growth prospects. In addition, changes in laws and regulations could adversely impact our business, financial condition, results of operations and growth prospects.