Public Storage
For the period ended Sep 30, 2026. Filed Oct 26, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Oct 26, 2026
PSA$337.46-0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-07-29.
0001628280-26-050612
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-10-26.
0001628280-26-067286
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 117 previous paragraphs and 118 current paragraphs.
50 unchanged; 55 reworded; 12 added; 12 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 11 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
Recent Developments
Current report
On July 20, 2026, PSOC issued $900 million aggregate principal amount of senior notes at an effective interest rate of 4.855%, including $400 million aggregate principal amount of fixed senior notes bearing interest at an annual rate of 4.700% maturing on February 1, 2032, and $500 million aggregate principal amount of fixed rate senior notes bearing interest at an annual rate of 5.150% maturing on August 15, 2036. The senior notes are guaranteed by Public Storage. We received $886 million of net proceeds from the issuance.
Current report
On July 22, 2026, we closed the acquisition of National Storage Affiliates Trust (“NSA”). On September 1, 2026, we completed the acquisition of PS Canada. See Note 3 to our September 30, 2026 consolidated financial statements “Acquisitions”, for more details.
Current report
On September 16, 2026, PS Canada Finance ULC, a finance subsidiary of the Company, completed a public offering of C$400 million principal amount of senior notes, bearing interest at an annual rate of 4.540% and maturing on September 16, 2033. The senior notes are guaranteed by Public Storage and PSOC. We received C$398.5 million of net proceeds from the issuance.
Current report
For the three months ended September 30, 2026, net income allocable to our common shareholders was $312.3 million or $1.69 per diluted common share, compared to $461.4 million or $2.62 per diluted common share for the same period in 2025, representing a decrease of $149.1 million or $0.93 per diluted common share. The decrease is due primarily to (i) a $122.3 million increase in depreciation expense, (ii) a $114.6 million increase in transaction and integration expenses, (iii) a $22.8 million increase in interest expense, (iv) a $9.5 million increase in general and administrative expense, (v) a $9.1 million decrease in equity in earnings from unconsolidated real estate entities, and a (vi) $7.7 million increase in net income allocated to noncontrolling interests, partially offset by (vii) a $76.5 million increase in self-storage net operating income, (viii) an increase of $26.5 million related to gains on sale of real estate through eminent domain proceedings, (ix) a $19.6 million increase in ancillary net operating income and a (x) $17.9 million decline in income tax expense primarily due to the release of a valuation allowance.
Current report
Operating Results for the Nine Months Ended September 30, 2026 and 2025
Current report
(a) Represents the absolute nominal change with respect to churn, and the percentage change with respect to all other items.
Current report
Repairs and maintenance expense increased 17.4% and 4.2% for the three and nine months ended September 30, 2026 as compared to the same periods in 2025. Repairs and maintenance expense levels are dependent upon many factors such as (i) damage and equipment malfunctions, (ii) short-term local supply and demand factors for material and labor, and (iii) weather conditions, which can impact costs such as snow removal, roof repairs, and HVAC maintenance and repairs.
Current report
Strategic Acquisitions are a component of Acquired Facilities which represents 550 facilities related to our acquisitions of NSA and PS Canada. During the three months ended September 30, 2026 these facilities contributed net operating income of $58.6 million.
Current report
Management Fees: At September 30, 2026, in our property management program, we managed 417 facilities (30.8 million net rentable square feet) for unrelated third parties and were under contract to manage 76 additional facilities (4.6 million net rentable square feet), including 70 facilities that are currently under construction. As part of the NSA acquisition we acquired management contracts to manage properties in various joint ventures. Management fees increased $13.6 million and $19.1 million for the three and nine months ended September 30, 2026, respectively, as compared to 2025, primarily as a result of the new management agreements acquired during the period.
Current report
Transaction and Integration Costs: During the nine months ended September 30, 2026, we incurred transaction and integration costs related to the acquisitions of NSA and PS Canada, of which $119.3 million was recognized as an expense in the Consolidated Statements of Income.
Current report
Gain on Sale of Real Estate: During the nine months ended September 30, 2026, we recorded $27.4 million in gains, primarily in connection with the disposition of a real estate facility pursuant to eminent domain proceedings.
Removed paragraphs (12)
Previous report
On July 22, 2026, the Company closed its merger with National Storage Affiliates Trust (“NSA”) in an all-stock transaction (the “Merger”). Under the terms of the Merger, NSA common shareholders and holders of Class A units of the NSA operating partnership received 0.1400 of a common share (or OP Unit, as applicable) of the Company for each issued and outstanding common share (or partnership unit) of NSA they owned. Concurrently with the closing, NSA's operating partnership contributed a subset of properties to a newly formed JV, with participating NSA OP unitholders holding an $800 million equity interest, and the Company holding the remaining $200 million equity interest and providing a $237 million mezzanine loan as part of its initial capitalization. Following the Merger, the combined company owned and/or managed over 4,500 locations and approximately 327 million net rentable square feet.
Previous report
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 report
On June 25, 2026, PSOC entered into a fourth amended and restated credit agreement of $3.0 billion maturing on June 25, 2030 (the “Revolver”) and a $500 million delayed draw term loan maturing on June 25, 2031 with an interest rate at SOFR plus 0.700% (the “Term Loan” and together with the Revolver, the “Credit Facility) which replaces in its entirety the Company’s $1.5 billion revolving credit facility set to mature June 12, 2027. Additionally, the Company has established a commercial paper note program and may issue up to $1 billion of unsecured commercial paper notes that bear interest at variable rates and have varying maturities (generally 30 days or less, with a maximum of 364 days).
Previous report
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 report
Operating Results for the Six Months Ended June 30, 2026 and 2025
Previous report
We expect industry-wide demand from new customers in 2026 to be similar to 2025, 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, pricing restrictions and microeconomic uncertainty. As a result, we expect Same Store Facilities revenues in 2026 to be modestly below those earned in 2025.
Previous report
Late Charges and Administrative Fees
Previous report
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 report
Other direct property costs include administrative expenses specific to each self-storage facility, such as property loss, insurance, telephone and data communication lines, business license costs, bank charges related to processing the facilities’ cash receipts, tenant mailings, credit card fees, eviction costs, and the cost of operating each property’s rental office. These costs increased 5.4% and 3.8% for the three and six months ended June 30, 2026, respectively as compared to the same periods in 2025, primarily due to increased property loss and restoration expenses related to fire and flooding events, insurance expenses and an increase in credit card fees as a result of a long-term trend of more customers paying with credit cards rather than cash, checks, or other methods of payment with lower transaction costs.
Previous report
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 report
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 report
For our proposed acquisition of PS Canada, if consummated, we plan to fund the transaction through the issuance of OP Units and debt.
Reworded paragraphs (55)
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, 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.
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 expected acquisition, disposition, development, and redevelopment activity, including with respect to the integration of acquired assets and operations, supply and demand for our self-storage facilities, information relating to operating trends in our markets, expectations regarding operating expenses, including property tax changes, expectations regarding the impacts from inflation and changes in macroeconomic conditions, our strategic priorities, expectations with respect to financing activities, rental rates, cap rates, and yields, leasing expectations, our credit ratings, settlement of common shares sold pursuant to forward sale confirmations under our At-the-Market (“ATM”) program; and all other statements other than statements of historical fact. Such statements are based on management’s beliefs and assumptions made based on information currently available to management and may be identified by the use of the words “expects,” “believes,” “anticipates,” “should,” “estimates,” and similar expressions.
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 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.
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 filed with the Securities and Exchange Commission (the “SEC”), in this Quarterly Report on Form 10-Q, and in our other filings with the SEC. These include changes in demand for our facilities, changes in macroeconomic conditions, failure to realize the expected benefits of the NSA and PS Canada acquisitions, unexpected liabilities or expenses related to the NSA or PS Canada acquisitions, challenges to successfully and timely integrate the NSA and PS Canada acquisitions, including difficulties retaining and hiring key personnel, changes in national self-storage facility development activity, impacts from our strategic corporate transformation initiative, impacts of natural disasters, adverse changes in laws and regulations including governing property tax, evictions, rental rates, minimum wage levels, and insurance, adverse economic effects from public health emergencies, international military conflicts, international trade disputes (including threatened or implemented tariffs imposed by the U.S., Canada or other countries), or similar events impacting public health and/or economic activity, increases in the costs of our primary customer acquisition channels, adverse impacts to us and our customers from high interest rates, inflation, unfavorable foreign currency rate fluctuations, or changes in federal or state tax laws related to the taxation of REITs, security breaches, including ransomware, or a failure of our networks, systems, or technology.
Previous 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.
Current wording
During the nine months ended September 30, 2026, there were no material changes to our critical accounting estimates as compared to the critical accounting estimates disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025.
Previous 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.
Current wording
Revenues generated by our Same Store Facilities increased by 0.5% ($4.8 million) for the three months ended September 30, 2026 and remained relatively unchanged for the nine months ended September 30, 2026, as compared to the same periods in 2025. Cost of operations for Same Store Facilities increased by 0.4% ($1.0 million) and 1.2% ($9.2 million), respectively, for the three and nine months ended September 30, 2026 as compared to the same periods in 2025. Realized annual rent per occupied square foot for our Same Store Facilities increased by 0.2% for the three months ended September 30, 2026 and decreased by 0.3% for the nine months ended September 30, 2026, while average occupancy increased by 0.3% and 0.2%, respectively, as compared to the same periods in 2025.
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 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.
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 881 facilities with 63.3 million net rentable square feet for a cost of $11.6 billion. Within our non-same store portfolio as of September 30, 2026, our Developed and Expanded Facilities include a total of 121 self-storage facilities with 14.0 million net rentable square feet. For development and expansions completed by September 30, 2026, we incurred a total cost of $1.8 billion. During the three and nine months ended September 30, 2026, combined net operating income generated by our Acquired Facilities and Developed and Expanded Facilities increased 95.6% ($73.3 million) and 52.0% ($107.6 million), respectively, as compared to the same periods in 2025.
Previous wording
As of June 30, 2026, we had outstanding forward sale agreements under our ATM program for a total of 425,278 common shares, representing expected net proceeds of approximately $137.4 million (assuming full physical settlement of such agreements).
Current wording
As of September 30, 2026, we had outstanding forward sale agreements under our ATM program for a total of 1,230,141 common shares, representing expected net proceeds of approximately $399.2 million (assuming full physical settlement of such agreements).
Previous wording
For the six months ended June 30, 2026, net income allocable to our common shareholders was $927.0 million or $5.26 per diluted common share, compared to $667.2 million or $3.79 per diluted common share for the same period in 2025, representing an increase of $259.8 million or $1.47 per diluted common share. The increase is due primarily to (i) a $273.6 million increase in foreign currency gain primarily associated with our Euro denominated notes payable, (ii) an $18.8 million increase in self-storage net operating income, (iii) a $13.4 million increase in ancillary operation net operating income and (iv) a $10.4 million increase in equity in earnings of Shurgard, partially offset by (v) a $12.5 million increase in depreciation and amortization expense (vi) a $21.2 million increase in interest expense and (vii) a $23.8 million increase in general and administrative expense.
Current wording
For the nine months ended September 30, 2026, net income allocable to our common shareholders was $1.2 billion or $6.92 per diluted common share, compared to $1.1 billion or $6.42 per diluted common share for the same period in 2025, representing an increase of $110.7 million or $0.50 per diluted common share. The increase is due primarily to (i) a $282.6 million increase in foreign currency gain primarily associated with our euro-denominated notes payable, (ii) a $95.3 million increase in self-storage net operating income, (iii) a $32.9 million increase in ancillary net operating income, (iv) an increase of $26.6 million related to gains on sale of real estate through eminent domain proceedings, and (v) an $18.2 million decline in income tax expense primarily due to the release of a valuation allowance, partially offset by (vi) a $134.8 million increase in depreciation and amortization expense, (vii) a $119.3 million increase in transaction and integration expenses, (viii) a $44.0 million increase in interest expense, (ix) a $28.6 million increase in general and administrative expense and (x) a $7.8 million increase in net income allocated to to noncontrolling interests.
Previous 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.
Current wording
The $95.3 million increase in self-storage net operating income for the nine months ended September 30, 2026 as compared to the same period in 2025 is a result of a $105.8 million increase attributable to our Non-Same Store Facilities reflecting the impact of newly acquired facilities and the lease-up of development/expansion properties partially offset by a decrease of $10.5 million attributable to our Same Store Facilities as a result of increased cost of operations primarily due to increased property tax expense.
Previous wording
Funds from Operations (“FFO”) and FFO per diluted common share (“FFO per share”) are non-GAAP measures defined by Nareit. We believe that FFO and FFO per share are useful to REIT investors and analysts in measuring our performance because Nareit’s definition of FFO excludes items included in net income that do not relate to or are not indicative of our operating and financial performance. FFO represents net income before real estate-related depreciation and amortization, which is excluded because it is based upon historical costs and assumes that building values diminish ratably over time, while we believe that real estate values fluctuate due to market conditions. FFO also excludes gains or losses on sale of real estate assets and real estate impairment charges, which are also based upon historical costs and are impacted by historical depreciation. FFO and FFO per share are not a substitute for net income or earnings per share. FFO is not a substitute for net cash flow in evaluating our liquidity or ability to pay dividends, because it excludes investing and financing activities presented on our consolidated statements of cash flows. In addition, other REITs may compute these measures differently, so comparisons among REITs may not be helpful.
Current wording
Funds from Operations (“FFO”) and FFO per diluted common share and unit holders (“FFO per share and unit”) are non-GAAP measures defined by Nareit. We believe that FFO and FFO per share and unit are useful to REIT investors and analysts in measuring our performance because Nareit’s definition of FFO excludes items included in net income that do not relate to or are not indicative of our operating and financial performance. FFO represents net income before real estate-related depreciation and amortization, which is excluded because it is based upon historical costs and assumes that building values diminish ratably over time, while we believe that real estate values fluctuate due to market conditions. FFO also excludes gains or losses on sale of real estate assets and real estate impairment charges, which are also based upon historical costs and are impacted by historical depreciation. FFO and FFO per share and unit are not a substitute for net income or earnings per share. FFO is not a substitute for net cash flow in evaluating our liquidity or ability to pay dividends, because it excludes investing and financing activities presented on our consolidated statements of cash flows. In addition, other REITs may compute these measures differently, so comparisons among REITs may not be helpful.
Previous wording
For the six months ended June 30, 2026, FFO was $8.59 per diluted common share as compared to $7.15 per diluted common share for the same period in 2025, representing an increase of 20.1%, or $1.44 per diluted common share.
Current wording
For the three months ended September 30, 2026, FFO was $3.81 per diluted common share as compared to $4.33 per diluted common share for the same period in 2025, representing a decrease of 12.0%, or $0.52 per diluted common share.
Previous 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.
Current wording
For the nine months ended September 30, 2026, FFO was $12.39 per diluted common share as compared to $11.48 per diluted common share for the same period in 2025, representing an increase of 7.9%, or $0.91 per diluted common share.
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, (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.
Current wording
We also presents “Core FFO” and “Core FFO per share and unit” non-GAAP measures that represent FFO and FFO per share excluding the impact of (i) foreign currency exchange gains and losses, (ii) charges related to the redemption of preferred shares, (iii) transaction and integration costs related to the NSA acquisition and PS Canada acquisition, (iv) certain other non-cash and/or nonrecurring income or expense items primarily representing, with respect to the periods presented below, the impact of corporate transformation costs, loss contingencies, due diligence costs incurred in pursuit of strategic transactions, cancelled project write-off, realized or unrealized gain or loss on private equity investments and non-hedge designated derivative transactions, income tax benefits from certain discrete items, certain CEO transition-related and executive severance costs, and amortization of assumed debt discounts and acquired non real estate-related intangibles, and (v) the income tax effect of each adjustment calculated by applying the tax rate of the applicable tax jurisdiction. We review Core FFO and Core FFO per share and unit to evaluate our ongoing operating performance, and believe they are used by investors and REIT analysts in a similar manner. However, Core FFO and Core FFO per share and unit are not substitutes for net income and net income per share. Because other REITs may not compute Core FFO or Core FFO per share and unit in the same manner as we do, may not use the same terminology, or may not present such measures, Core FFO and Core FFO per share may not be comparable among REITs.
Previous wording
The following table reconciles net income to FFO and Core FFO and reconciles diluted earnings per share to FFO per share and Core FFO per share:
Current wording
The following table reconciles net income to FFO and Core FFO and reconciles diluted earnings per share to FFO per share and unit and Core FFO per share and unit:
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) 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.
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”) and, (ii) 881 facilities we acquired since January 1, 2024 or that were acquired prior to 2024 that remain unstabilized since January 1, 2024 (the “Acquired Facilities”), (iii) 121 facilities that have been developed or expanded since January 1, 2021 including those developed or expanded earlier that remain unstabilized since January 1, 2024, or properties that will commence expansion by December 31, 2026 (the “Developed and Expanded Facilities”), and (iv) 15 other facilities, which are otherwise not stabilized with respect to occupancies or rental rates since January 1, 2024 (the “Other Non-Same Store Facilities”). The Acquired Facilities, Developed and Expanded Facilities, and Other Non-Same Store Facilities are collectively referred to as the “Non-Same Store Facilities”. See Note 16 to our September 30, 2026 consolidated financial statements “Segment Information,” for a reconciliation of the amounts in the tables below to our total net income.
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 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.
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 71% of the aggregate net rentable square feet of our U.S. consolidated self-storage portfolio at September 30, 2026. It includes various measures and detail that we do not include in the analysis of the developed, acquired, and other Non-Same Store Facilities, due to the relative magnitude and importance of the Same Store Facilities relative to our other self-storage facilities.
Previous 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.
Current wording
Revenues generated by our Same Store Facilities increased 0.5% for the three months ended September 30, 2026 and remained relatively unchanged for the nine months ended September 30, 2026, as compared to the same periods in 2025. Revenues for the three months ended September 30, 2026 increased primarily due to a 0.2% increase in realized annual rent per occupied square foot and a 0.3% increase in average occupancy, partially offset by a 0.5% decrease in Late Charges and Administrative Fees as compared to the same period in 2025. Revenues remained relatively unchanged for the nine months ended September 30, 2026 due primarily to a 0.3% decrease in realized annual rent per occupied square foot and a 2.0% decrease in Late Charges and Administrative Fees, partially offset by a 0.2% increase in average occupancy, as compared to the same period in 2025.
Previous 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.
Current wording
The 0.2% increase in realized annual rent per occupied square foot for the three months ended September 30, 2026, as compared to the same period in 2025, reflected improved rental rates charged to new customers, including a 9.3% increase in average annual contract rent per square foot for customers moving in during the period. For the nine months ended September 30, 2026, realized annual rent per occupied square foot decreased 0.3% as compared to the same period in 2025, as the impact of improved rental rates during the third quarter was more than offset by lower realized rents during the first half of 2026. The weighted average square foot occupancy for our Same Store Facilities was 92.2% and 92.0% for the three and nine months ended September 30, 2026, respectively, representing an increase of 0.3% and 0.2%, respectively, due primarily to lower move-out activity and reduced customer churn.
Previous 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.
Current wording
Move-out activities from our customers decreased for the three and nine months ended September 30, 2026 as compared to the same periods in 2025. Move-out average annual contract rent per square foot decreased for the three and nine months ended September 30, 2026, as compared to the same periods in 2025.
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 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.
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 nine months ended September 30, 2026 and 2025. Contract rents gained from move-ins and contract rents lost from move-outs included in the table assume move-in and move-out activities occur at the beginning of each period presented. Churn is defined as units moved out during the period, divided by starting occupied units at the beginning of the period. The table also includes promotional discounts, which vary based upon the move-in contractual rates, move-in volume, and percentage of customers moving in who receive the discount.
Previous 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.
Current wording
Cost of operations (excluding depreciation and amortization) increased 0.4% and 1.2% for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in 2025. The increase for the three months ended September 30, 2026 was due to increased repairs and maintenance expense and marketing costs partially offset by lower indirect costs of operations. The increase for the nine months ended September 30, 2026, was due to increased property tax expense, repairs and maintenance and marketing expense partially offset by lower indirect cost of operations.
Previous 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.
Current wording
Property tax expense decreased 0.8% for the three months ended September 30, 2026, as compared to the same period in 2025, as a result of refunds received during the quarter. Property tax expense increased 1.4% for the nine months ended September 30, 2026, as a result of higher assessed values.
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 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.
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 12.5% and 4.6% for the three and nine months ended September 30, 2026 as compared to the same periods in 2025. The increase in marketing expense is due to utilizing a higher volume of online paid search programs to attract new tenants.
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 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.
Current wording
Indirect Cost of Operations represents costs related to our supervisory payroll, centralized management costs, and share-based compensation. Indirect Cost of Operations decreased 11.2% and 1.0% for the three and nine months ended September 30, 2026, respectively as compared to the same periods in 2025, primarily due to increased non-same store count and elevated share-based compensation forfeitures.
Previous 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:
Current wording
The Acquired Facilities represent 707 facilities that we acquired in 2026, 2025, and 2024, and 174 facilities that we acquired before 2024 that have not fully stabilized. As a result of the stabilization process and timing of when these facilities were acquired, year-over-year changes can be significant. The following table summarizes the acquisition costs with respect to the Acquired Facilities:
Previous 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.
Current wording
We have been active in acquiring facilities in recent years. Our Acquired Facilities includes a total of 881 facilities with 63.3 million net rentable square feet for a total cost of $11.6 billion. During the three and nine months ended September 30, 2026, these facilities contributed net operating income of $113.7 million and $213.8 million, respectively.
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 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.
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 nine months ended September 30, 2026, we acquired 598 self-storage facilities across 28 states and Canada with 40.5 million net rentable square feet for $7.3 billion. Subsequent to September 30, 2026, we acquired or were under contract to acquire 17 self-storage facilities across twelve states with 1.3 million net rentable square feet for $211.5 million. Our total acquisitions planned or completed through September 30, 2026, excluding the acquisitions of NSA and PS Canada, amount to $713.2 million.
Previous 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:
Current wording
The Developed and Expanded Facilities include 113 facilities that were developed on new sites or expanded to increase their net rentable square footage that are not fully stabilized and 8 expansion projects that are currently in process at September 30, 2026. The following table summarizes the development costs with respect to the Developed and Expanded Facilities:
Previous 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.
Current wording
Our Developed and Expanded Facilities includes a total of 121 self-storage facilities with 14.0 million net rentable square feet. For development and expansions completed by September 30, 2026, we incurred a total cost of $1.8 billion. During the three and nine months ended September 30, 2026, Developed and Expanded Facilities contributed net operating income of $36.3 million and $100.9 million, respectively.
Previous 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.
Current wording
We expect to add a total of 1.3 million net rentable square feet of storage space by expanding existing self-storage facilities for an aggregate development cost of approximately $217.8 million. At September 30, 2026, we had 37 additional facilities in development, which we expect will have a total of 3.3 million net rentable square feet of storage space and have an aggregate development cost of approximately $571.2 million. We expect these facilities to open over the next 18 to 24 months.
Previous 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.
Current wording
As of September 30, 2026, we have ongoing development and expansion projects that we estimate will have an aggregate development cost of approximately $789.0 million.
Previous 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.
Current wording
The Other Non-Same Store Facilities have an aggregate of 1.0 million net rentable square feet at September 30, 2026. As of September 30, 2026 and 2025, the average occupancy for these facilities totaled 85.3% and 77.4%, respectively, and the annual contract rent per occupied square foot totaled $16.62 and $18.49 as of September 30, 2026 and 2025, respectively.
Previous 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.
Current wording
Depreciation and amortization expense for Self-Storage Operations increased $113.6 million and $126.2 million for the three and nine months ended September 30, 2026, as compared to the same period in 2025, primarily due to acquired facilities and newly developed and expanded facilities.
Previous wording
Ancillary revenues and expenses include amounts associated with the reinsurance of policies against losses to goods stored by customers in our self-storage facilities, sale of merchandise at our self-storage facilities, and management of property owned by unrelated third parties. The following table sets forth our ancillary operations:
Current wording
Ancillary revenues and expenses include amounts associated with the reinsurance of policies against losses to goods stored by customers in our self-storage facilities, sale of merchandise at our self-storage facilities, and management fees related to properties we manage through our joint venture investments and agreements with unrelated third parties. Ancillary revenues and expenses also include amounts related to Strategic Acquisitions. During the period ended September 30, 2026, Ancillary net operating income related to our Strategic Acquisitions was $9.2 million. The following table sets forth our ancillary operations:
Previous 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.
Current wording
Tenant reinsurance operations: Tenant reinsurance premium revenue increased 20.4% and 14.6% for the three and nine months ended September 30, 2026, respectively, over the same periods in 2025, as a result of an increase in our customer base with respect to acquired, newly developed, and expanded facilities and the third party properties we manage, as well as higher insurance coverage and premium rates in our customers base at our same store facilities. Tenant reinsurance premium revenue generated from customers at our Same Store Facilities were $54.7 million and $159.7 million for the three and nine months ended September 30, 2026, respectively, representing a 7.6% and 6.9% increase, respectively, over the same periods in 2025.
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 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.
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 properties such as hurricanes and floods. Tenant reinsurance cost of operations increased 3.5% and 3.9% for the three and nine months ended September 30, 2026, respectively, as compared the same periods in 2025, primarily due to increased claim volumes and expenses related to flooding and burglary as well as increased access fees we paid to the third-party owners of properties we manage driven by the significant growth of our third-party property management program.
Previous 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.
Current wording
Equity in earnings (loss) of unconsolidated real estate entities: We account for our equity investment in Shurgard, the Legacy NSA JVs, and the PS-NSA JV, using the equity method and record our pro-rata share of net income. For the three and nine months ended September 30, 2026, we recognized a loss of $5.5 million and earnings of $6.3 million, respectively, as compared to earnings of $3.7 million and $5.1 million for the same periods in 2025. Included in our equity earnings were $28.9 million and $51.1 million of our share of depreciation and amortization expense for the three and nine months ended September 30, 2026, respectively, as compared to $14.7 million and $45.7 million for the same periods in 2025. The increase from the prior year in depreciation was due to the addition of the Legacy NSA JVs and PS-NSA JV. The decline in equity in earnings for the three months ended September 30, 2026 was primarily attributable to incremental depreciation and amortization associated with these investments.
Previous 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.
Current wording
Real estate acquisition and development expense: For the three and nine months ended September 30, 2026, we incurred a total of $4.3 million and $11.9 million, respectively, of internal and external expenses related to our acquisition and development of real estate facilities, as compared to $2.8 million and $12.8 million for the same periods in 2025. These amounts are net of $4.2 million and $10.2 million for the three and nine months ended September 30, 2026, respectively, in development costs that were capitalized to newly developed and redeveloped self-storage facilities, as compared to $3.5 million and $10.3 million for the same periods in 2025. The year-over-year change of real estate acquisition and development expense was primarily due to the recognition of a $3.9 million impairment write-down of certain land development parcels that were marketed for sale during the nine months ended September 30, 2025, as compared to a $0.2 million impairment recovery for the same period in 2026.
Previous 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.
Current wording
General and administrative expense: For the three and nine months ended September 30, 2026, general and administrative expense increased $9.5 million and $28.6 million, respectively, as compared to the same periods in 2025. The $28.6 million year-over-year increase was primarily related to (i) a $15.2 million increase in executive severance and CEO transition costs, (ii) a $4.9 million increase in corporate transformation costs and (iii) a $3.5 million increase in executive labor costs costs.
Previous wording
Interest earned on cash balances decreased $1.3 million and $4.8 million during the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025, due primarily to lower average cash balances and lower interest rates earned in 2025. As described in Note 8, during the three and six months ended June 30, 2026, we incurred $0.6 million and $5.9 million in unrealized losses, respectively, on swaps that did not qualify for hedge accounting. The swaps were subsequently modified and designated as cash flow hedges in the second quarter.
Current wording
Interest earned on cash balances was relatively flat for the three months ended September 30, 2026 and decreased $4.8 million during the nine months ended September 30, 2026 as compared to the same periods in 2025, due primarily to lower average cash balances. As described in Note 8, during the nine months ended September 30, 2026, we incurred $5.9 million in unrealized losses on swaps that did not qualify for hedge accounting. The swaps were subsequently modified and designated as cash flow hedges in the second quarter.
Previous wording
Interest expense: For the three and six months ended June 30, 2026, we incurred $86.1 million and $167.2 million, respectively, of interest on our outstanding notes payable, as compared to $73.1 million and $146.7 million for the same periods in 2025. In determining interest expense, these amounts were offset by capitalized interest of $1.3 million and $2.4 million during the three and six months ended June 30, 2026, respectively, associated with our development activities, as compared to $1.5 million and $3.1 million for the same periods in 2025. The increase of interest expense for the three and six months ended June 30, 2026 as compared to the same periods in 2025 is due to the issuance of U.S. Dollar and Euro denominated unsecured notes in 2025 and 2026. At June 30, 2026, we had $10.3 billion of notes payable outstanding, with a weighted average interest rate of approximately 3.3%.
Current wording
Interest expense: For the three and nine months ended September 30, 2026, we incurred $104.0 million and $271.2 million, respectively, of interest on our outstanding notes payable, as compared to $81.6 million and $228.3 million for the same periods in 2025. In determining interest expense, these amounts were offset by capitalized interest of $1.5 million and $3.9 million during the three and nine months ended September 30, 2026, respectively, associated with our development activities, as compared to $1.9 million and $5.0 million for the same periods in 2025. The increase of interest expense for the three and nine months ended September 30, 2026 as compared to the same periods in 2025 is due to the issuance of U.S. Dollar, Canadian Dollar and euro-denominated unsecured notes in 2025 and 2026 partially offset by $0.2 million of interest expense benefit amortized from accumulated other comprehensive income from settled interest rate swaps designated as cash flow hedges. At September 30, 2026, we had $12.1 billion of notes payable outstanding, with a weighted average interest rate of approximately 3.6%.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The $76.5 million increase in self-storage net operating income for the three months ended September 30, 2026 as compared to the same period in 2025 is primarily a result of a $72.8 million increase attributable to our Non-Same Store Facilities (as defined below) reflecting the impact of newly acquired facilities and the lease-up of development/expansion properties,