Public Storage

Previous wording

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 for the year ended December 31, 2024 filed with the Securities and Exchange Commission (the “SEC”) on February 24, 2025 and in our other filings with the SEC. These include changes in demand for our facilities, changes in macroeconomic conditions, changes in national self-storage facility development activity, 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. and threatened or implemented tariffs imposed by foreign countries in retaliation), 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.

Current wording

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 for the year ended December 31, 2024 filed with the Securities and Exchange Commission (the “SEC”) on February 24, 2025 and in our other filings with the SEC. These include changes in demand for our facilities, changes in macroeconomic conditions, 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. and threatened or implemented tariffs imposed by foreign countries in retaliation), 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.

Previous wording

During the three months ended March 31, 2025, 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, 2024.

Current wording

During the six months ended June 30, 2025, 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, 2024.

Previous wording

During the three months ended March 31, 2025, revenues generated by our Same Store Facilities increased by 0.1% ($0.5 million), as compared to the same period in 2024, while Same Store cost of operations increased by 0.3% ($0.8 million). For the three months ended March 31, 2025, realized annual rent per occupied square foot for our Same Store Facilities increased by 0.6% while average occupancy decreased by 0.6%, as compared to the same period in 2024.

Current wording

During the three and six months ended June 30, 2025, revenues generated by our Same Store Facilities increased by 0.2% ($2.0 million) and 0.1% ($2.6 million), respectively, as compared to the same periods in 2024, while Same Store Facilities cost of operations increased by 2.9% ($6.4 million) and 1.5% ($7.2 million), respectively. For each of the three and six months ended June 30, 2025, realized annual rent per occupied square foot for our Same Store Facilities increased by 0.6%, while average occupancy decreased by 0.4%, as compared to the same period in 2024.

Previous wording

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 2023, we acquired a total of 195 facilities with 14.5 million net rentable square feet for $3.1 billion. Additionally, within our non-same store portfolio, our Newly Developed and Expanded Facilities include a total of 100 self-storage facilities with 11.8 million net rentable square feet. For development and expansions completed by March 31, 2025, we incurred a total cost of $1.4 billion. During the three months ended March 31, 2025, combined net operating income generated by our Acquired Facilities and Newly Developed and Expanded Facilities increased 20.2% ($10.8 million), as compared to the same period in 2024.

Current wording

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 2023, we acquired a total of 211 facilities with 15.6 million net rentable square feet for $3.2 billion. Additionally, within our non-same store portfolio, our Newly Developed and Expanded Facilities include a total of 102 self-storage facilities with 12.0 million net rentable square feet. For development and expansions completed by June 30, 2025, we incurred a total cost of $1.5 billion. During the three and six months ended June 30, 2025, combined net operating income generated by our Acquired Facilities and Newly Developed and Expanded Facilities increased 18.4% ($20.5 million) and 16.7% ($9.7 million), respectively, as compared to the same periods in 2024.

Previous wording

We have embarked on a solar program under which we plan to install solar panels on over 1,400 of our self-storage facilities. We have completed the installations on 946 facilities through March 31, 2025. We spent approximately $13 million on the program in the three months ended March 31, 2025 and expect to spend approximately $50 million over 2025 on this effort.

Current wording

We have embarked on a solar program under which we plan to install solar panels on over 1,400 of our self-storage facilities. We have completed the installations on 1,024 facilities through June 30, 2025. We spent approximately $29 million on the program in the six months ended June 30, 2025 and expect to spend approximately $50 million over 2025 on this effort.

Previous wording

On April 6, 2025, Ki Corporation (“Ki”) and Public Storage submitted a non-binding indicative offer to acquire all of the outstanding stapled securities of Abacus Storage King (ASX:ASK) that are not already held by Ki or its subsidiaries (together, the “Ki Group”) for A$1.47 per stapled security. Abacus Storage King is one of the largest self-storage owners in Australia and New Zealand with approximately 126 operating properties, 21 development sites, and 75 managed/licensed properties. The Ki Group is currently ASK’s major securityholder, and each of Ki and Public Storage would have approximately 50% interest following the transaction. Public Storage’s share of the total estimated cost, excluding direct transaction costs, is approximately $586 million (A$970 million), anticipated to be funded with Australian Dollar denominated unsecured debt. The transaction is subject to a number of conditions, including due diligence, negotiation of a definitive agreement, and legal, regulatory, and shareholder approvals. Australia and New Zealand have an established and growing self-storage market that benefits from outsized population inflows, strong economic growth, and rising adoption by consumers. Public Storage would share its expertise and wide-ranging competitive advantages to help enhance Abacus Storage King’s customer experience, operating performance, ancillary businesses, and portfolio growth.

Current wording

On July 13, 2025, Ki Corporation (“Ki”) and Public Storage (together, the “Consortium”) announced a revised non-binding indicative offer to acquire all of the outstanding stapled securities of Abacus Storage King (ASX:ASK) that are not already held by Ki or its subsidiaries (together, the “Ki Group”) for A$1.65 per stapled security. The Ki Group is currently ASK’s major securityholder. Under the terms of the revised offer, Public Storage’s share of the total estimated cost, excluding direct transaction costs, would be approximately $710 million (A$1.08 billion), anticipated to be funded with Australian Dollar denominated unsecured debt. Abacus Storage King is one of the largest self-storage owners in Australia and New Zealand with approximately 126 operating properties, 21 development sites, and 75 managed properties. The structure of the transaction is subject to finalization, and the transaction is subject to a number of conditions, including due diligence, negotiation of a definitive agreement, and legal, regulatory, and shareholder approvals.

Previous wording

For the three months ended March 31, 2025, net income allocable to our common shareholders was $358.2 million or $2.04 per diluted common share, compared to $459.2 million or $2.60 per diluted common share for the same period in 2024, representing a decrease of $101.0 million or $0.56 per diluted common share. The decrease is due primarily to (i) a $106.2 million increase in foreign currency exchange losses primarily associated with our Euro denominated notes payable partially offset by (ii) a $13.2 million increase in self-storage net operating income.

Current wording

For the six months ended June 30, 2025, net income allocable to our common shareholders was $667.2 million or $3.79 per diluted common share, compared to $927.6 million or $5.26 per diluted common share for the same period in 2024, representing a decrease of $260.4 million or $1.47 per diluted common share. The decrease is due primarily to (i) a $264.8 million increase in foreign currency exchange losses primarily associated with our Euro denominated notes payable partially offset by (ii) a $20.9 million increase in self-storage net operating income.

Previous wording

The $13.2 million increase in self-storage net operating income in the three months ended March 31, 2025 as compared to the same period in 2024 is a result of a $13.5 million increase attributable to our Non-Same Store Facilities (as defined below), partially offset by a $0.3 million decrease attributable to our Same Store Facilities. Revenues for the Same Store Facilities increased 0.1% or $0.5 million in the three months ended March 31, 2025 as compared to the same period in 2024, due primarily to higher realized annual rent per occupied square foot offset by a decline in occupancy. Cost of operations for the Same Store Facilities increased by 0.3% or $0.8 million in the three months ended March 31, 2025 as compared to the same period in 2024, due primarily to increased property tax expense offset by decreased on-site property manager payroll expense. The increase in net operating income of $13.5 million for the Non-Same Store Facilities is due primarily to the impact of facilities acquired in 2023 and 2024.

Current wording

The $20.9 million increase in self-storage net operating income in the six months ended June 30, 2025 as compared to the same period in 2024 is a result of a $25.5 million increase attributable to our Non-Same Store Facilities, partially offset by a $4.6 million decrease attributable to our Same Store Facilities. Revenues for the Same Store Facilities increased 0.1% or $2.6 million in the six months ended June 30, 2025 as compared to the same period in 2024, due primarily to higher realized annual rent per occupied square foot offset by a decline in occupancy. Cost of operations for the Same Store Facilities increased by 1.5% or $7.2 million in the six months ended June 30, 2025 as compared to the same period in 2024, due primarily to increased property tax expense offset by decreased on-site property manager payroll expense. The increase in net operating income of $25.5 million for the Non-Same Store Facilities is due primarily to the impact of facilities acquired in 2023 and 2024.

Previous wording

For the three months ended March 31, 2025, FFO was $3.71 per diluted common share as compared to $4.24 per diluted common share for the same period in 2024, representing a decrease of 12.5%, or $0.53 per diluted common share.

Current wording

For the three months ended June 30, 2025, FFO was $3.44 per diluted common share as compared to $4.30 per diluted common share for the same period in 2024, representing a decrease of 20.0%, or $0.86 per diluted common share.

Previous wording

Our self-storage operations are analyzed in four groups: (i) 2,565 facilities that we have owned and operated on a stabilized basis since January 1, 2023 (the “Same Store Facilities”), (ii) 195 facilities we acquired since January 1, 2023 (the “Acquired Facilities”), (iii) 100 facilities that have been newly developed or expanded, or that will commence expansion by December 31, 2025 (the “Newly Developed and Expanded Facilities”), and (iv) 225 other facilities, which are otherwise not stabilized with respect to occupancies or rental rates since January 1, 2023 (the “Other Non-Same Store Facilities”). The Acquired Facilities, Newly Developed and Expanded Facilities, and Other Non-Same Store Facilities are collectively referred to as the “Non-Same Store Facilities”. See Note 14 to our March 31, 2025 consolidated financial statements “Segment Information,” for a reconciliation of the amounts in the tables below to our total net income.

Current wording

Our self-storage operations are analyzed in four groups: (i) 2,565 facilities that we have owned and operated on a stabilized basis since January 1, 2023 (the “Same Store Facilities”), (ii) 211 facilities we acquired since January 1, 2023 (the “Acquired Facilities”), (iii) 102 facilities that have been newly developed or expanded, or that will commence expansion by December 31, 2025 (the “Newly Developed and Expanded Facilities”), and (iv) 225 other facilities, which are otherwise not stabilized with respect to occupancies or rental rates since January 1, 2023 (the “Other Non-Same Store Facilities”). The Acquired Facilities, Newly Developed and Expanded Facilities, and Other Non-Same Store Facilities are collectively referred to as the “Non-Same Store Facilities”. See Note 14 to our June 30, 2025 consolidated financial statements “Segment Information,” for a reconciliation of the amounts in the tables below to our total net income.

Previous wording

The following table summarizes the historical operating results (for all periods presented) of these 2,565 facilities (175.3 million net rentable square feet) that represent approximately 79% of the aggregate net rentable square feet of our U.S. consolidated self-storage portfolio at March 31, 2025. 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.

Current wording

The following table summarizes the historical operating results (for all periods presented) of these 2,565 facilities (175.3 million net rentable square feet) that represent approximately 78% of the aggregate net rentable square feet of our U.S. consolidated self-storage portfolio at June 30, 2025. 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.

Previous wording

Revenues generated by our Same Store Facilities increased 0.1% in the three months ended March 31, 2025, as compared to the same period in 2024, due primarily to a 0.6% increase in realized annual rent per occupied square foot offset by a 0.6% decrease in average occupancy.

Current wording

Revenues generated by our Same Store Facilities increased 0.2% and 0.1% in the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024. The 0.2% increase in revenues for the three months ended June 30, 2025 was due primarily to a 0.6% increase in realized annual rent per occupied square foot, offset by a 0.4% decrease in average occupancy, as compared to the same period in 2024. The 0.1% increase in the six months ended June 30, 2025 was due primarily to a 0.6% increase in realized annual rent per occupied square foot, offset by a 0.4% decrease in average occupancy, as compared to the same period in 2024.

Previous wording

The 0.6% increase in realized annual rent per occupied square foot in the three months ended March 31, 2025, as compared to the same period in 2024, was due to cumulative rate increases to existing long-term tenants over the past twelve months offset by a decrease in average rates per square foot charged to new tenants moving in over the same period. At March 31, 2025, annual contract rent per occupied square foot was 0.8% higher as compared to March 31, 2024.

Current wording

The 0.6% increase in realized annual rent per occupied square foot in the three and six months ended June 30, 2025, as compared to the same periods in 2024, was due to cumulative rate increases to existing long-term tenants over the past twelve months offset by a decrease in average rates per square foot charged to new tenants moving in over the same period. At June 30, 2025, annual contract rent per occupied square foot was 0.6% higher as compared to June 30, 2024.

Previous wording

The weighted average square foot occupancy for our Same Store Facilities was 91.5% in the three months ended March 31, 2025, representing a decrease of 0.6%, as compared to the same period in 2024. Higher year-over-year customer demand in the three months ended March 31, 2025, coupled with lower move-in rates and increased promotional discounts, led to a higher move-in volume net of move-out volumes, as compared to the same period in 2024. As a result, the year-over-year decline in occupancy at March 31, 2025 of 0.3% was reduced as compared to the year-over-year decline in occupancy at December 31, 2024 of 0.7%.

Current wording

The weighted average square foot occupancy for our Same Store Facilities was 92.6% and 92.1% in the three and six months ended June 30, 2025, respectively, representing a decrease of 0.4% as compared to the same periods in 2024. Higher year-over-year customer demand for the six months ended June 30, 2025, coupled with lower move-in rates led to a modestly higher move-in volume net of move-out volumes, as compared to the same period in 2024. The square foot occupancy for our Same Store Facilities increased 1.7% at June 30, 2025 as compared to December 31, 2024.

Previous wording

The following table sets forth average annual contract rent per square foot and total square footage for tenants moving in and moving out during the three months ended March 31, 2025 and 2024. Contract rents gained from move-ins and contracts rents lost from move-outs included in the table assume move-in and move-out activities occur at the beginning of each period presented. The table also includes promotional discounts, which vary based upon the move-in contractual rates, move-in volume, and percentage of tenants moving in who receive the discount.

Current wording

The following table sets forth average annual contract rent per square foot and total square footage for tenants moving in and moving out during the three and six months ended June 30, 2025 and 2024. Contract rents gained from move-ins and contracts rents lost from move-outs included in the table assume move-in and move-out activities occur at the beginning of each period presented. The table also includes promotional discounts, which vary based upon the move-in contractual rates, move-in volume, and percentage of tenants moving in who receive the discount.

Previous wording

Industry-wide demand was slightly higher in the first quarter of 2025 as compared to the same period in 2024 due to increases in customers who sought storage space for reasons other than home-moving activities. Demand fluctuates due to various local and regional factors, including the overall economy. Demand for our self-storage space is also impacted by new supply of self-storage space and alternatives to self-storage.

Current wording

Industry-wide demand was slightly higher in the first half of 2025 as compared to the same period in 2024 due to increases in customers who sought storage space for reasons other than home-moving activities. Demand fluctuates due to various local and regional factors, including the overall economy. Demand for our self-storage space is also impacted by new supply of self-storage space and alternatives to self-storage.

Previous wording

We expect industry-wide demand from new customers in 2025 to improve as compared to 2024, subject to potential adverse effects from evolving political and macroeconomic uncertainty including changes in trade policy and new tariffs. Additionally, following the recent wildfires in southern California in early 2025, we anticipate an adverse impact on revenue growth at our self-storage facilities located in Los Angeles County and Ventura County, where a temporary governmental pricing limitation is in place under the “State of Emergency” declarations. These self-storage facilities generated approximately 10% of revenues earned by our Same Store Facilities in 2024. As a result, we expect Same Store Facilities revenues in 2025 to be similar to those earned in 2024.

Current wording

We expect industry-wide demand from new customers in 2025 to improve as compared to 2024, across a diverse set of markets, subject to potential adverse effects from evolving political and macroeconomic uncertainty including changes in trade policy and new tariffs. Additionally, following the recent wildfires in southern California in early 2025, we anticipate an adverse impact on revenue growth at our self-storage facilities located in Los Angeles County, where a temporary governmental pricing limitation is in place under the “State of Emergency” declarations. These self-storage facilities generated approximately 10% of revenues earned by our Same Store Facilities in 2024. As a result, we expect Same Store Facilities revenues in 2025 to be similar to those earned in 2024.

Previous wording

Late charges and administrative fees increased 1.7% for the three months ended March 31, 2025 as compared to the same period in the previous year as a result of higher late charges collected on delinquent accounts and higher administrative fees as a result of higher move-in activities.

Current wording

Late charges and administrative fees increased 0.1% and 0.9% for the three and six months ended June 30, 2025 as compared to the same period in the previous year as a result of higher late charges collected on delinquent accounts and higher administrative fees as a result of higher move-in activities.

Previous wording

Cost of operations (excluding depreciation and amortization) increased 0.3% in the three months ended March 31, 2025, as compared to the same period in 2024, due primarily to increased property tax expense, partially offset by decreased on-site property manager payroll expense.

Current wording

Cost of operations (excluding depreciation and amortization) increased 2.9% and 1.5% in the three and six months ended June 30, 2025, respectively, as compared to the same period in 2024, due primarily to increased property tax expense and centralized management costs, partially offset by decreased on-site property manager payroll expense and marketing.

Previous wording

Property tax expense increased 4.3% in the three months ended March 31, 2025, as compared to the same period in 2024, as a result of higher assessed values. We expect property tax expense to grow approximately 5% in 2025 due primarily to higher assessed values.

Current wording

Property tax expense increased 4.4% in the three and six months ended June 30, 2025, as compared to the same period in 2024, as a result of higher assessed values. We expect property tax expense to grow approximately 5% in 2025 due primarily to higher assessed values.

Previous wording

On-site property manager payroll expense decreased 12.4% in the three months ended March 31, 2025, as compared to the same period in 2024, primarily due to reduction in labor hours driven by the implementation of dynamic staffing models based on customer activity levels. We expect on-site property manager payroll expense to decrease moderately in 2025 as compared to 2024 as we continue to enhance operational processes.

Current wording

On-site property manager payroll expense decreased 2.9% and 7.9% in the three and six months ended June 30, 2025, respectively, as compared to the same period in 2024, primarily due to reduction in labor hours driven by the implementation of dynamic staffing models based on customer activity levels. We expect on-site property manager payroll expense to decrease moderately in 2025 as compared to 2024 as we continue to enhance operational processes.

Previous wording

The Acquired Facilities represent 195 facilities that we acquired in 2023, 2024, and 2025. 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 operating data with respect to the Acquired Facilities:

Current wording

The Acquired Facilities represent 211 facilities that we acquired in 2023, 2024, and 2025. 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 operating data with respect to the Acquired Facilities:

Previous wording

(c)The amount includes the costs allocated to land, buildings and intangible assets associated with the 127 self-storage facilities from the Simply Acquisition.

Current wording

(d)The amount includes the costs allocated to land, buildings and intangible assets associated with the 127 self-storage facilities from the Simply Acquisition.

Previous wording

We have been active in acquiring facilities in recent years. Since the beginning of 2023, we acquired a total of 195 facilities with 14.5 million net rentable square feet for $3.1 billion. During the three months ended March 31, 2025, these facilities contributed net operating income of $35.8 million.

Current wording

We have been active in acquiring facilities in recent years. Since the beginning of 2023, we acquired a total of 211 facilities with 15.6 million net rentable square feet for $3.2 billion. During the three and six months ended June 30, 2025, these facilities contributed net operating income of $37.6 million and $73.4 million, respectively.

Previous wording

During 2023, we acquired BREIT Simply Storage LLC (“Simply”), a self-storage company that owned and operated 127 self-storage facilities (9.4 million square feet) and managed 25 self-storage facilities (1.8 million square feet) for third parties, for a purchase price of $2.2 billion in cash. Included in the acquisition results in the table above are the Simply portfolio self-storage revenues of $38.6 million, NOI of $26.6 million (including Direct NOI of $28.0 million), and average square footage occupancy of 87.8% for the three months ended March 31, 2025.

Current wording

During 2023, we acquired BREIT Simply Storage LLC (“Simply”), a self-storage company that owned and operated 127 self-storage facilities (9.4 million square feet) and managed 25 self-storage facilities (1.8 million square feet) for third parties, for a purchase price of $2.2 billion in cash. Included in the acquisition results in the table above are the Simply portfolio self-storage revenues of $77.5 million, NOI of $53.9 million (including Direct NOI of $56.7 million), and average square footage occupancy of 88.6% for the six months ended June 30, 2025.

Previous wording

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. Subsequent to March 31, 2025, we acquired or were under contract to acquire five self-storage facilities across four states with 0.4 million net rentable square feet for $43.2 million.

Current wording

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 six months ended June 30, 2025, we acquired 25 self-storage facilities across nine states with 1.8 million net rentable square feet for $303.3 million. Subsequent to June 30, 2025, we acquired or were under contract to acquire 47 self-storage facilities across 17 states with 3.1 million net rentable square feet for $481.9 million. As a result, our total acquisitions through June 30, 2025, amount to $785.2 million.

Previous wording

The Newly Developed and Expanded Facilities include 38 facilities that were developed on new sites since January 1, 2020, and 62 facilities expanded to increase their net rentable square footage. Of these expansions, 45 were completed before 2024, 10 were completed in 2024 or 2025, and seven are currently in process at March 31, 2025. The following table summarizes operating data with respect to the Newly Developed and Expanded Facilities:

Current wording

The Newly Developed and Expanded Facilities include 40 facilities that were developed on new sites since January 1, 2020, and 62 facilities expanded to increase their net rentable square footage. Of these expansions, 45 were completed before 2024, 10 were completed in 2024 or 2025, and seven are currently in process at June 30, 2025. The following table summarizes operating data with respect to the Newly Developed and Expanded Facilities:

Previous wording

Our Newly Developed and Expanded Facilities includes a total of 100 self-storage facilities of 11.8 million net rentable square feet. For development and expansions completed by March 31, 2025, we incurred a total cost of $1.4 billion. During the three months ended March 31, 2025, Newly Developed and Expanded Facilities contributed net operating income of $28.2 million.

Current wording

Our Newly Developed and Expanded Facilities includes a total of 102 self-storage facilities of 12.0 million net rentable square feet. For development and expansions completed by June 30, 2025, we incurred a total cost of $1.5 billion. During the three and six months ended June 30, 2025, Newly Developed and Expanded Facilities contributed net operating income of $30.6 million and $58.8 million, respectively.

Previous wording

We typically underwrite new developments to stabilize at approximately an 8% NOI yield on cost (adjusted for impacts from tenant reinsurance and maintenance capital expenditures). Our developed facilities have thus far leased up as expected and are at various stages of their revenue stabilization periods. The actual annualized yields that we may achieve on these facilities upon stabilization will depend on many factors, including local and current market conditions in the vicinity of each property and the level of new and existing supply.

Current wording

We typically underwrite new developments to stabilize at approximately an 8% yield on cost (adjusted for impacts from tenant reinsurance and maintenance capital expenditures). Our developed facilities have thus far leased up as expected and are at various stages of their revenue stabilization periods. The actual annualized yields that we may achieve on these facilities upon stabilization will depend on many factors, including local and current market conditions in the vicinity of each property and the level of new and existing supply.

Previous wording

The facilities under “expansions completed” represent those facilities where the expansions have been completed at March 31, 2025. We incurred a total of $748.6 million in direct cost to expand these facilities, demolished a total of 0.5 million net rentable square feet of storage space, and built a total of 4.4 million net rentable square feet of new storage space.

Current wording

The facilities under “expansions completed” represent those facilities where the expansions have been completed at June 30, 2025. We incurred a total of $759.9 million in direct cost to expand these facilities, demolished a total of 0.5 million net rentable square feet of storage space, and built a total of 4.5 million net rentable square feet of new storage space.

Previous wording

At March 31, 2025, we had 26 additional facilities in development, which will have a total of 2.4 million net rentable square feet of storage space and have an aggregate development cost totaling approximately $492.9 million. We expect these facilities to open over the next 18 to 24 months.

Current wording

At June 30, 2025, we had 27 additional facilities in development, which will have a total of 2.6 million net rentable square feet of storage space and have an aggregate development cost totaling approximately $487.9 million. We expect these facilities to open over the next 18 to 24 months.

Previous wording

The facilities under “expansion in process” represent those facilities where construction is in process at March 31, 2025, and together with additional future expansion activities primarily related to our Same Store Facilities at March 31, 2025, 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 direct development cost of $172.6 million.

Current wording

The facilities under “expansion in process” represent those facilities where construction is in process at June 30, 2025, and together with additional future expansion activities primarily related to our Same Store Facilities at June 30, 2025, we expect to add a total of 1.2 million net rentable square feet of storage space by expanding existing self-storage facilities for an aggregate direct development cost of $160.2 million.

Previous wording

The Other Non-Same Store Facilities have an aggregate of 21.1 million net rentable square feet at March 31, 2025. During the three months ended March 31, 2025 and 2024, the average occupancy for these facilities totaled 83.8% and 79.4%, respectively, and the realized rent per occupied square foot totaled $15.78 and $15.98, respectively.

Current wording

The Other Non-Same Store Facilities have an aggregate of 21.1 million net rentable square feet at June 30, 2025. During the three and six months ended June 30, 2025 and 2024, the average occupancy for these facilities totaled 86.1% and 85.0%, respectively, as compared to 81.2% and 80.3% for the same periods in 2024, and the realized rent per occupied square foot totaled $15.66 and $15.72, respectively, as compared to $16.04 and $16.01 for the same periods in 2024.

Previous wording

Tenant reinsurance operations: Tenant reinsurance premium revenue increased $5.6 million or 10.4% in the three months ended March 31, 2025 over the same period in 2024, as a result of an increase in our tenant base with respect to acquired, newly developed, and expanded facilities and the third party properties we manage, as well as higher insurance participation in our tenant base at our same store facilities. Tenant reinsurance premium revenue generated from tenants at our Same Store Facilities were $44.8 million and $42.9 million in the three months ended March 31, 2025, respectively, representing a 4.4% increase.

Current wording

Tenant reinsurance operations: Tenant reinsurance premium revenue increased $5.7 million or 10.3% for the three months ended June 30, 2025, and increased $11.4 million or 10.3% for the six months ended June 30, 2025, in each case as compared to the same period in 2024, as a result of an increase in our tenant 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 tenant base at our same store facilities. Tenant reinsurance premium revenue generated from tenants at our Same Store Facilities were $45.6 million and $90.3 million for the three and six months ended June 30, 2025, respectively, as compared to $43.2 million and $86.1 million for the same periods in 2024, representing an increase of 5.6% and 4.9%, respectively.

Previous wording

Third-party property management: At March 31, 2025, in our third-party property management program, we managed 314 facilities (24.4 million net rentable square feet) for unrelated third parties, and were under contract to manage 96 additional facilities (8.3 million net rentable square feet) including 90 facilities that are currently under construction. During the three months ended March 31, 2025, we added 18 facilities to the program and had 10 facilities exit the program. While we expect this business to increase in scope and size, we do not expect any significant changes in overall profitability of this business in the near term as we seek new properties to manage and are in the earlier stages of fill-up for newly managed properties.

Current wording

Third-party property management: At June 30, 2025, in our third-party property management program, we managed 329 facilities (25.4 million net rentable square feet) for unrelated third parties, and were under contract to manage 90 additional facilities (7.7 million net rentable square feet) including 88 facilities that are currently under construction. During the six months ended June 30, 2025, we added 33 facilities to the program and had 16 facilities exit the program. While we expect this business to increase in scope and size, we do not expect any significant changes in overall profitability of this business in the near term as we seek new properties to manage and are in the earlier stages of fill-up for newly managed properties.

Previous wording

We account for our equity investment in Shurgard using the equity method and record our pro-rata share of its net income. For the three months ended March 31, 2025 and 2024, we recognized equity in earnings of Shurgard of $3.6 million and $6.1 million, respectively. Included in our equity earnings from Shurgard were $13.3 million and $9.8 million of our share of depreciation and amortization expense for the three months ended March 31, 2025 and 2024, respectively.

Current wording

We account for our equity investment in Shurgard using the equity method and record our pro-rata share of its net income. For the three and six months ended June 30, 2025, we recognized a loss from our equity method investment of Shurgard of $2.2 million and earnings of $1.4 million, respectively, as compared to earnings of $6.5 million and $12.6 million for the same periods in 2024. Included in our equity earnings from Shurgard were $17.7 million and $31.0 million of our share of depreciation and amortization expense for the three and six months ended June 30, 2025, respectively, as compared to $9.8 million and $19.5 million for the same periods in 2024.

Previous wording

For purposes of recording our equity in earnings from Shurgard, the Euro was translated at exchange rates of approximately 1.082 U.S. Dollars per Euro at March 31, 2025 (1.039 at December 31, 2024), and average exchange rates of 1.051 and 1.086 for the three months ended March 31, 2025 and 2024, respectively.

Current wording

For purposes of recording our equity in earnings from Shurgard, the Euro was translated at exchange rates of approximately 1.174 U.S. Dollars per Euro at June 30, 2025 (1.039 at December 31, 2024), and average exchange rates of 1.134 and 1.076 for the three months ended June 30, 2025 and 2024, respectively, and average exchange rates of 1.093 and 1.081 for the six months ended June 30, 2025 and 2024, respectively.

Previous wording

Real estate acquisition and development expense: In the three months ended March 31, 2025, we incurred a total of $7.4 million and $3.7 million, respectively, of internal and external expenses related to our acquisition and development of real estate facilities. These amounts are net of $3.5 million and $4.4 million in the three months ended March 31, 2025, respectively, in development costs that were capitalized to newly developed and redeveloped self-storage facilities. The year-over-year increase of real estate acquisition and development expense was primarily due to $3.8 million of impairment write-down of land parcels associated with cancelled development projects during the three months ended March 31, 2025.

Current wording

Real estate acquisition and development expense: In the three and six months ended June 30, 2025, we incurred a total of $2.5 million and $10.0 million, respectively, of internal and external expenses related to our acquisition and development of real estate facilities, as compared to $2.9 million and $6.6 million for the same periods in 2024. These amounts are net of $3.4 million and $6.8 million in the three and six months ended June 30, 2025, respectively, in development costs that were capitalized to newly developed and redeveloped self-storage facilities, as compared to $4.2 million and $8.7 million for the same periods in 2024.

Previous wording

General and administrative expense increased $3.8 million in the three months ended March 31, 2025, as compared to the same period of 2024 due primarily to 1) increased legal costs associated with nonrecurring corporate legal matters of $2.6 million and 2) $0.8 million of costs recognized in the three months ended March 31, 2025 related to a strategic corporate transformation initiative to modernize the workforce for our corporate functions and relocate certain employees of our corporate functions from Glendale, California, to Dallas, Texas. The initiative is intended to transform our corporate functions, improve efficiency and productivity, enhance collaboration, and align the organizational structure with our long-term growth objectives. While we expect to incur corporate transformation costs, primarily related to severance, retention, cross-training and relocation costs as we complete the initiative over the next two years, we do not expect these costs to have a material impact on our operating results.

Current wording

General and administrative expense increased $3.0 million in the six months ended June 30, 2025, as compared to the same period of 2024, primarily due to increased legal costs associated with nonrecurring corporate legal matters and corporate transformation costs recognized in the six months ended June 30, 2025.

Previous wording

Interest expense: For the three months ended March 31, 2025 and 2024, we incurred $73.6 million and $70.1 million, respectively, of interest on our outstanding notes payable. In determining interest expense, these amounts were offset by capitalized interest of $1.6 million and $2.4 million during the three months ended March 31, 2025 and 2024, respectively, associated with our development activities. The increase of interest expense in the three months ended March 31, 2025 as compared to the same period in 2024 is due to the issuance of U.S. Dollar and Euro denominated unsecured notes in April 2024. At March 31, 2025, we had $9.4 billion of notes payable outstanding, with a weighted average interest rate of approximately 3.1%.

Current wording

Interest expense: For the three and six months ended June 30, 2025, we incurred $73.1 million and $146.7 million, respectively, of interest on our outstanding notes payable, as compared to $76.1 million and $146.2 million for the same periods in 2024. In determining interest expense, these amounts were offset by capitalized interest of $1.5 million and $3.1 million during the three and six months ended June 30, 2025, respectively, associated with our development activities, as compared to $2.8 million and $5.2 million for the same periods in 2024. The increase of interest expense in the three and six months ended June 30, 2025 as compared to the same periods in 2024 is due to the issuance of U.S. Dollar and Euro denominated unsecured notes in April 2024. At June 30, 2025, we had $10.4 billion of notes payable outstanding, with a weighted average interest rate of approximately 3.0%.