Public Storage

Previous wording

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 2026 outlook and all underlying assumptions, our expected acquisition, disposition, development, and redevelopment activity, 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, 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 “outlook,” “guidance,” “expects,” “believes,” “anticipates,” “should,” “estimates,” and similar expressions.

Current wording

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 2026 outlook and all underlying assumptions, our expected acquisition, disposition, development, and redevelopment activity, 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 “outlook,” “guidance,” “expects,” “believes,” “anticipates,” “should,” “estimates,” and similar expressions.

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, 2025 filed with the Securities and Exchange Commission (the “SEC”) on February 12, 2026 and in our other filings with the SEC. These include changes in demand for our facilities, changes in macroeconomic conditions, risks associated with our ability to consummate the Merger with NSA and the timing and closing of the Merger including, among other things, NSA’s ability to obtain NSA shareholder approval required to consummate the Merger, the satisfaction or waiver of other conditions to closing in the Merger Agreement, unanticipated difficulties or expenditures relating to the Merger, potential difficulties in employee retention as a result of the Merger, the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger and the outcome of legal proceedings instituted against us, our trustees and others related to the Merger, 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.

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, 2025 filed with the Securities and Exchange Commission (the “SEC”) on February 12, 2026 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 filed with the SEC on April 27, 2026, 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 Merger, including the risk that NSA’s business will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected, including our ability to retain and hire 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. 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, 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.

Current wording

During the six months ended June 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.

Previous wording

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 Newly Developed and Expanded Facilities (both as defined below).

Current wording

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).

Previous wording

Revenues generated by our Same Store Facilities remained relatively unchanged for three months ended March 31, 2026 as compared to the same period in 2025. Cost of operations for Same Store Facilities decreased by 1.1% for the three months ended March 31, 2026 as compared to the same period in 2025. For the three months ended March 31, 2026, realized annual rent per occupied square foot for our Same Store Facilities decreased by 0.3%, while average occupancy increased by 0.4%, as compared to the same period in 2025.

Current wording

During the three and six months ended June 30, 2026, revenues generated by our Same Store Facilities decreased by 0.6% ($5.9 million) and 0.3% ($6.1 million), respectively, as compared to the same periods in 2025. Cost of operations for Same Store Facilities increased by 4.4% ($11.1 million) and 1.6% ($8.2 million), respectively, for the three and six months ended June 30, 2026 as compared to the same periods in 2025. For the three and six months ended June 30, 2026, realized annual rent per occupied square foot for our Same Store Facilities decreased by 0.8% and 0.5%, respectively, while average occupancy increased by 0.2% and 0.3%, respectively, as compared to the same periods in 2025.

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 2024, including the ongoing integration of unstabilized properties acquired prior to 2024, we have expanded our portfolio by a total of 286 facilities with 22.9 million net rentable square feet for a cost of $4.3 billion. Within our non-same store portfolio as of March 31, 2026, our Newly Developed and Expanded Facilities include a total of 120 self-storage facilities with 13.7 million net rentable square feet. For development and expansions completed by March 31, 2026, we incurred a total cost of $1.8 billion. During the three months ended March 31, 2026, combined net operating income generated by our Acquired Facilities and Newly Developed and Expanded Facilities increased 29.5% ($18.5 million) as compared to the same period in 2025.

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 2024, including the ongoing integration of unstabilized properties acquired prior to 2024, we have expanded our portfolio by a total of 306 facilities with 24.5 million net rentable square feet for a cost of $4.5 billion. Within our non-same store portfolio as of June 30, 2026, our Developed and Expanded Facilities include a total of 120 self-storage facilities with 13.8 million net rentable square feet. For development and expansions completed by June 30, 2026, we incurred a total cost of $1.8 billion. During the three and six months ended June 30, 2026, combined net operating income generated by our Acquired Facilities and Developed and Expanded Facilities increased 23.3% ($15.8 million) and 26.3% ($34.3 million), respectively, as compared to the same periods in 2025.

Previous wording

On March 16, 2026, the Company announced that it had entered into a merger agreement (the “Merger”) to acquire National Storage Affiliates Trust (“NSA”), a Maryland real estate investment trust (“NSA”), listed on the New York Stock Exchange, in an all-stock transaction. NSA’s portfolio includes more than 1,000 properties, 69 million rentable square feet, and 550,000 units across 37 states and Puerto Rico. In connection with the Merger, Public Storage and limited partners in NSA’s operating partnership will form a joint venture consisting of certain properties on NSA’s operating platform. The NSA operating partnership unitholders are expected to own approximately 80% of the joint venture at inception, with Public Storage holding the remaining interest. Public Storage will exclusively manage the joint venture portfolio and will earn customary property management, asset management and tenant reinsurance income. The transaction is currently expected to close in the third quarter of 2026, subject to the approval of NSA equity holders and the satisfaction of other customary closing conditions.

Current wording

On June 22, 2026, the Company announced that it had entered into an agreement to acquire PS Canada. PS Canada’s portfolio includes 68 properties and approximately 5.3 million rentable square feet across major Canadian metropolitan markets. This is currently expected to close in the third quarter of 2026, subject to the satisfaction of customary closing conditions.

Previous wording

For the three months ended March 31, 2026, net income allocable to our common shareholders was $476.8 million or $2.71 per diluted common share, compared to $358.2 million or $2.04 per diluted common share for the same period in 2025, representing an increase of $118.6 million or $0.67 per diluted common share. The increase is due primarily to (i) a $110.4 million increase in foreign currency gain primarily associated with our Euro denominated notes payable and (ii) a $20.6 million increase in self-storage net operating income, partially offset by (iii) an $8.0 million increase in depreciation expense and (iv) an $8.0 million increase in interest expense.

Current wording

For the three months ended June 30, 2026, net income allocable to our common shareholders was $450.3 million or $2.55 per diluted common share, compared to $309.0 million or $1.76 per diluted common share for the same period in 2025, representing an increase of $141.3 million or $0.79 per diluted common share. The increase is due primarily to (i) a $163.3 million increase in foreign currency gain primarily associated with our Euro denominated notes payable and (ii) a $7.2 million increase in equity in earnings of Shurgard partially offset by (iii) a $13.2 million increase in interest expense and (iv) an $18.6 million increase in general and administrative expense.

Previous wording

The $20.6 million increase in self-storage net operating income for the three months ended March 31, 2026 as compared to the same period in 2025 is a result of a $17.9 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.

Current wording

The $18.8 million increase in self-storage net operating income for the six months ended June 30, 2026 as compared to the same period in 2025 is a result of a $33.1 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, partially offset by a $14.3 million decrease attributable to our Same Store Facilities. Revenues for the Same Store Facilities decreased by 0.3% or $6.1 million in 2026 as compared to 2025, due primarily to lower realized annual rent per occupied square foot partially offset by an increase in average occupancy. Cost of operations for the Same Store Facilities increased by 1.6% or $8.2 million in 2026 as compared to 2025, due primarily to increased property tax expense and indirect cost of operation.

Previous wording

For the three months ended March 31, 2026, FFO was $4.39 per diluted common share as compared to $3.71 per diluted common share for the same period in 2025, representing an increase of 18.3%, or $0.68 per diluted common share.

Current wording

For the three months ended June 30, 2026, FFO was $4.21 per diluted common share as compared to $3.44 per diluted common share for the same period in 2025, representing an increase of 22.4%, or $0.77 per diluted common share.

Previous wording

We also present “Core FFO” and “Core FFO per share” 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 securities, and (iii) 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, realized or unrealized gain or loss on private equity investments and non-hedge designated derivative transactions, certain CEO transition-related costs, and amortization of acquired non real estate-related intangibles. We review Core FFO and Core FFO per share to evaluate our ongoing operating performance and we believe they are used by investors and REIT analysts in a similar manner. However, Core FFO and Core FFO per share are not substitutes for net income and net income per share. Because other REITs may not compute Core FFO or Core FFO per share 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.

Current wording

We also present “Core FFO” and “Core FFO per share” 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 securities, (iii) transaction and integration costs related to the NSA Merger, and (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, certain CEO transition-related costs, and amortization of acquired non real estate-related intangibles. We review Core FFO and Core FFO per share to evaluate our ongoing operating performance, and we believe they are used by investors and REIT analysts in a similar manner. However, Core FFO and Core FFO per share are not substitutes for net income and net income per share. Because other REITs may not compute Core FFO or Core FFO per share 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.

Previous wording

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”), (ii) 286 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) 120 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 “Newly 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, 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, 2026 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) 2,755 facilities that we have owned and operated on a stabilized basis since January 1, 2024 (the “Same Store Facilities”), (ii) 306 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) 120 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 14 to our June 30, 2026 consolidated financial statements “Segment Information,” for a reconciliation of the amounts in the tables below to our total net income.

Previous wording

(c)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.

Current wording

(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.

Previous wording

(b)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 14 to our March 31, 2026 consolidated financial statements for a reconciliation of NOI to our total net income for all periods presented.

Current wording

(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 14 to our June 30, 2026 consolidated financial statements for a reconciliation of NOI to our total net income for all periods presented.

Previous wording

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 84% of the aggregate net rentable square feet of our U.S. consolidated self-storage portfolio at March 31, 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.

Current wording

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 83% of the aggregate net rentable square feet of our U.S. consolidated self-storage portfolio at June 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.

Previous wording

Revenues generated by our Same Store Facilities were relatively unchanged for the three months ended March 31, 2026 as compared to the same period in 2025, due primarily to a 0.4% increase in average occupancy, offset by a 0.3% decrease in realized annual rent per occupied square foot and a 3.9% decrease in Late Charges and Administrative Fees, as compared to the same period in 2025.

Current wording

Revenues generated by our Same Store Facilities decreased 0.6% and 0.3% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. Revenues for the three months ended June 30, 2026 decreased primarily due to a 0.8% decrease in realized annual rent per occupied square foot and a 1.7% 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 0.3% decrease in revenues for the six months ended June 30, 2026 was due primarily to a 0.5% decrease in realized annual rent per occupied square foot and a 2.8% decrease in Late Charges and Administrative Fees, partially offset by a 0.3% increase in average occupancy, as compared to the same period in 2025.

Previous wording

The 0.3% decrease in realized annual rent per occupied square foot for the three months ended March 31, 2026 as compared to the same period in 2025, was due to lower average rates per square foot charged to new customers moving in as compared to average rates per square foot previously charged to customers moving out over the past twelve months partially mitigated by rental rate increases to existing long-term customers.

Current wording

The 0.8% and 0.5% decrease in realized annual rent per occupied square foot for the three and six months ended June 30, 2026, as compared to the same periods in 2025, was due to lower average rates per square foot charged to new customers moving in as compared to customers moving out. The weighted average square foot occupancy for our Same Store Facilities was 92.5% and 92.0% for the three and six months ended June 30, 2026, respectively, representing an increase of 0.2% and 0.3%, respectively, due primarily to an increase in move-in volume net of move-out volumes, as compared to the same periods in 2025. Move-in average annual contract rent per square foot increased for the three months ended June 30, 2026, as compared to the same period in 2025.

Previous wording

Move-out activities from our customers decreased for the three months ended March 31, 2026 as compared to the same period in 2025. Move-out average annual contract rent per square foot decreased for the three months ended March 31, 2026 as compared to the same period in 2025.

Current wording

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

Previous wording

The following table sets forth average annual contract rent per square foot and total square footage for customers moving in and moving out during the three months ended March 31, 2026 and 2025. 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 customers 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 customers moving in and moving out and churn during the three and six months ended June 30, 2026 and 2025. 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. 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.

Previous wording

Late charges and administrative fees decreased 3.9% for the three months ended March 31, 2026, as compared to the same period in 2025, as a result of lower late charges collected on delinquent accounts due to lower customer delinquency rates.

Current wording

Late charges and administrative fees decreased 1.7% and 2.8% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025, as a result of lower late charges collected on delinquent accounts due to lower customer delinquency rates for both periods.

Previous wording

Cost of operations (excluding depreciation and amortization) decreased 1.1% for the three months ended March 31, 2026 as compared to the same period in 2025 due primarily to decreased property tax expense, repairs and maintenance, and marketing partially offset by increased indirect costs of operation.

Current wording

Cost of operations (excluding depreciation and amortization) increased 4.4% and 1.6% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The year over-year increase for both periods was due primarily to increased property tax expense, marketing expense, other direct property costs and indirect costs of operations.

Previous wording

Property tax expense decreased 1.0% for the three months ended March 31, 2026, as compared to the same period in 2025 due to the timing of property tax appeals and refunds. We expect property tax expense to grow in 2026 due primarily to higher assessed values.

Current wording

Property tax expense increased 5.9% and 2.4% for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025, as a result of higher assessed values. We expect property tax expense to grow in 2026 due primarily to higher assessed values.

Previous wording

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 decreased by 4.5% for the three months ended March 31, 2026 as compared to the same period in 2025. The decrease was primarily due to realized cost efficiencies on our online paid search programs utilized to attract new customers.

Current wording

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 6.3% and 0.5% for the three and six months ended June 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.

Previous wording

Indirect Cost of Operations represents costs related to our supervisory payroll, centralized management costs, and share-based compensation. Indirect Cost of Operations increased 2.4% for the three months ended March 31, 2026 as compared to the same period in 2025, primarily related to changes in the administrative and compensation expenses for shared general corporate functions to the extent their efforts are devoted to self-storage operations. Such functions include information technology support, hardware, and software, as well as centralized administration of payroll, benefits, training, repairs and maintenance, customer service, pricing and marketing, operational accounting and finance, legal costs, and costs from field management executives.

Current wording

Indirect Cost of Operations represents costs related to our supervisory payroll, centralized management costs, and share-based compensation. Indirect Cost of Operations increased 5.7% and 4.1% for the three and six months ended June 30, 2026, respectively as compared to the same periods in 2025, primarily related to changes in compensation expenses for shared general corporate functions to the extent their efforts are devoted to self-storage operations. Such functions include information technology support, hardware, and software, as well as centralized administration of payroll, benefits, training, repairs and maintenance, customer service, pricing and marketing, operational accounting and finance, legal costs, and costs from field management executives.

Previous wording

The Acquired Facilities represent 112 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:

Current wording

The Acquired Facilities represent 132 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:

Previous wording

We have been active in acquiring facilities in recent years. Our acquired facilities includes a total of 286 facilities with 22.9 million net rentable square feet for a total cost of $4.3 billion. During the three months ended March 31, 2026, these facilities contributed net operating income of $49.2 million.

Current wording

We have been active in acquiring facilities in recent years. Our acquired facilities includes a total of 306 facilities with 24.5 million net rentable square feet for a total cost of $4.5 billion. During the three and six months ended June 30, 2026, these facilities contributed net operating income of $50.9 million and $100.1 million, respectively.

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. During the three months ended March 31, 2026, we acquired three self-storage facilities across three states with 0.2 million net rentable square feet for $20.8 million. Subsequent to March 31, 2026, we acquired or were under contract to acquire 15 self-storage facilities across four states with 1.2 million net rentable square feet for $165.5 million. Our total acquisitions planned or completed through March 31, 2026, amount to $186.3 million. Additionally, we recently announced our pending acquisition of NSA, refer to Note 3 for further details.

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, 2026, we acquired 23 self-storage facilities across nine states with 1.7 million net rentable square feet for $243.2 million. Subsequent to June 30, 2026, we acquired or were under contract to acquire 21 self-storage facilities across six states with 1.5 million net rentable square feet for $211.7 million. Our total acquisitions planned or completed through June 30, 2026, amount to $454.9 million. Additionally, we recently announced our pending acquisition of PS Canada and closed our acquisition of NSA. Refer to Note 3 for further details.

Previous wording

The Newly Developed and Expanded Facilities include 110 facilities that were developed on new sites or expanded to increase their net rentable square footage that are not fully stabilized. 10 expansion projects are currently in process at March 31, 2026. The following table summarizes the development costs with respect to the Newly Developed and Expanded Facilities:

Current wording

The Developed and Expanded Facilities include 111 facilities that were developed on new sites or expanded to increase their net rentable square footage that are not fully stabilized and 9 expansion projects that are currently in process at June 30, 2026. The following table summarizes the development costs with respect to the Developed and Expanded Facilities:

Previous wording

Our Newly Developed and Expanded Facilities includes a total of 120 self-storage facilities with 13.7 million net rentable square feet. For development and expansions completed by March 31, 2026, we incurred a total cost of $1.8 billion. During the three months ended March 31, 2026, Newly Developed and Expanded Facilities contributed net operating income of $31.8 million.

Current wording

Our Developed and Expanded Facilities includes a total of 120 self-storage facilities with 13.8 million net rentable square feet. For development and expansions completed by June 30, 2026, we incurred a total cost of $1.8 billion. During the three and six months ended June 30, 2026, Developed and Expanded Facilities contributed net operating income of $32.8 million and $64.6 million, respectively.

Previous wording

We expect to add a total of 1.0 million net rentable square feet of storage space by expanding existing self-storage facilities for an aggregate development cost of approximately $168.6 million. At March 31, 2026, we had 27 additional facilities in development, which we expect will have a total of 2.5 million net rentable square feet of storage space and have an aggregate development cost of approximately $449.8 million. We expect these facilities to open over the next 18 to 24 months.

Current wording

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 development cost of approximately $208.2 million. At June 30, 2026, we had 31 additional facilities in development, which we expect will have a total of 2.8 million net rentable square feet of storage space and have an aggregate development cost of approximately $483.5 million. We expect these facilities to open over the next 18 to 24 months.

Previous wording

As of March 31, 2026, we have ongoing development and expansion projects that we estimate will have an aggregate development cost of approximately $618.4 million.

Current wording

As of June 30, 2026, we have ongoing development and expansion projects that we estimate will have an aggregate development cost of approximately $691.7 million.

Previous wording

The Other Non-Same Store Facilities have an aggregate of 1.0 million net rentable square feet at March 31, 2026. As of March 31, 2026 and 2025, the average occupancy for these facilities totaled 83.4% and 76.9%, respectively, and the annual contract rent per occupied square foot totaled $15.80 and $19.01 as of March 31, 2026 and 2025, respectively.

Current wording

The Other Non-Same Store Facilities have an aggregate of 1.0 million net rentable square feet at June 30, 2026. As of June 30, 2026 and 2025, the average occupancy for these facilities totaled 86.8% and 75.9%, respectively, and the annual contract rent per occupied square foot totaled $16.01 and $18.56 as of June 30, 2026 and 2025, respectively.

Previous wording

Depreciation and amortization expense for Self-Storage Operations increased $8.0 million for the three months ended March 31, 2026, as compared to the same period in 2025, primarily due to acquired facilities and newly developed and expanded facilities.

Current wording

Depreciation and amortization expense for Self-Storage Operations increased $4.5 million and $12.5 million for the three and six months ended June 30, 2026, as compared to the same period in 2025, primarily due to acquired facilities and newly developed and expanded facilities.

Previous wording

Tenant reinsurance operations: Tenant reinsurance premium revenue increased $6.8 million or 11.3% in the three months ended March 31, 2026 over the same period 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 $51.8 million and $48.9 million in the three months ended March 31, 2026 and 2025, respectively, representing a 6.1% increase.

Current wording

Tenant reinsurance operations: Tenant reinsurance premium revenue increased $7.3 million or 11.8%, and $14.0 million or 11.6% for the three and six months ended June 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 $53.2 million and $105.0 million for the three and six months ended June 30, 2026, respectively, representing a 6.9% and 6.5% increase, respectively, over the same periods in 2025.

Previous wording

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 multiple properties such as hurricanes and floods. Tenant reinsurance cost of operations increased $1.2 million in the three months ended March 31, 2026 as compared the same period 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.

Current wording

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 multiple properties such as hurricanes and floods. Tenant reinsurance cost of operations decreased $0.1 million and increased $1.1 million for the three and six months ended June 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.

Previous wording

Third-party property management: At March 31, 2026, in our third-party property management program, we managed 370 facilities (29.0 million net rentable square feet) for unrelated third parties, and were under contract to manage 71 additional facilities (6.1 million net rentable square feet) including 68 facilities that are currently under construction. During the three months ended March 31, 2026, we added 20 facilities to the program and had 12 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, 2026, in our third-party property management program, we managed 388 facilities (28.0 million net rentable square feet) for unrelated third parties, and were under contract to manage 75 additional facilities (6.2 million net rentable square feet) including 68 facilities that are currently under construction. During the six months ended June 30, 2026, we added 40 facilities to the program and had 14 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

Equity in earnings (loss) of unconsolidated real estate entity: We account for the equity investments in Shurgard using the equity method and record our pro-rata share of the net income of these entities. For the three months ended March 31, 2026 and 2025, we recognized equity in earnings of Shurgard of $6.8 million and $3.6 million, respectively. Included in our equity earnings from Shurgard were $11.3 million and $13.3 million of our share of depreciation and amortization expense for the three months ended March 31, 2026 and 2025, respectively.

Current wording

Equity in earnings (loss) of unconsolidated real estate entity: 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, 2026, we recognized earnings from our equity method investment in Shurgard of $4.9 million and $11.8 million, respectively, as compared to losses of $2.2 million and earnings of $1.4 million for the same periods in 2025. Included in our equity earnings from Shurgard were $10.9 million and $22.2 million of our share of depreciation and amortization expense for the three and six months ended June 30, 2026, respectively, as compared to $17.7 million and $31.0 million for the same periods in 2025.

Previous wording

Real estate acquisition and development expense: In the three months ended March 31, 2026 and 2025, we incurred a total of $2.4 million and $7.4 million, respectively, of internal and external expenses related to our acquisition and development of real estate facilities. These amounts are net of $3.0 million and $3.5 million in the three months ended March 31, 2026 and 2025, respectively, in development costs that were capitalized to newly developed and redeveloped self-storage facilities. The year-over-year change of real estate acquisition and development expense was primarily due to the recognition of a $3.8 million impairment write-down of certain land development parcels that were marketed for sale during the three months ended March 31, 2025.

Current wording

Real estate acquisition and development expense: For the three and six months ended June 30, 2026, we incurred a total of $5.2 million and $7.6 million, respectively, of internal and external expenses related to our acquisition and development of real estate facilities, as compared to $2.5 million and $10.0 million for the same periods in 2025. These amounts are net of $3.0 million and $6.0 million for the three and six months ended June 30, 2026, respectively, in development costs that were capitalized to newly developed and redeveloped self-storage facilities, as compared to $3.4 million and $6.8 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 $3.8 million impairment write-down of certain land development parcels that were marketed for sale during the six months ended June 30, 2025, as compared to a $0.2 million impairment recovery for the same period in 2026.

Previous wording

General and administrative expense: General and administrative expense increased $5.2 million for the three months ended March 31, 2026 as compared to the same period in 2025 due primarily to (i) a $1.9 million increase in corporate transformation costs, (ii) an $2.6 million increase in CEO Transition costs and (iii) a $1.9 million increase in executive labor costs, partially offset by a $1.1 million reduction in legal fees.

Current wording

General and administrative expense: For the three and six months ended June 30, 2026, general and administrative expense increased $18.6 million and $23.8 million, respectively, as compared to the same periods in 2025. The year-over-year increase was primarily related to (i) a $7.6 million increase in executive severance and CEO transition costs, (ii) a $5.1 million increase in corporate transformation costs, (iii) a $4.7 million increase in transaction and integration costs, and (iv) a $3.4 million increase in executive labor costs.

Previous wording

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 cost savings of approximately $3 to $5 million annually, although the amount and timing of such savings are subject to change depending on a variety of factors.

Current wording

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.